A
s the largest industry in the Hong Kong Special Administrative Region of the People’s
Republic of China, the textile and apparel industry has certainly played a prominent role in its
economy. With its focus on international trade, Hong Kong boasts a free market economy and port,
and is one of the most successful trading and transshipment centers in East Asia. To that end, the
industry serves offshore manufacturers in addition to supplying goods to mainland Chinese and
domestic producers. Hong Kong — comprised of Hong Kong Island, Kowloon, the New Territories and a
number of small islands; and bordering China and the South China Sea — has created a niche in
textiles trading and high-value-added products. It also supplies printed and dyed fabrics, and
engages in cotton spinning, knit-to-shape panel knitting, fine-gauge cotton knit production and
denim weaving, according to the Hong Kong Trade Development Council (TDC). The TDC, a marketer and
representative of Hong Kong-based, primarily small and medium-sized enterprises, also notes that
the apparel industry has built a reputation as an original equipment manufacturer and original
design manufacturer.
Industry Structure
According to the 2005 International Textile Machinery Shipment Statistics report of the
International Textile Manufacturers Federation (ITMF), Switzerland, Hong Kong’s 2004 installed
spinning capacities totaled 48,000 short-staple spindles and 24,000 long-staple spindles. There
also were 20,000 open-end rotors installed that year. Weaving capacity in 2004 numbered 4,700
shuttleless looms and 300 shuttle looms. There were no reported filament or wool weaving looms that
year.
As of December 2006, there were 884 Hong Kong textile manufacturers, excluding knitted
outerwear producers, as noted in the Quarterly Report of Employment & Vacancies Statistics of
the Census & Statistics Department. That total was a year-over-year decrease of 9.2 percent. In
December 2006, the industry employed 10,449 people — 767 fewer workers than in December 2005. The
apparel industry, which included knitted outerwear and excluded footwear manufacturing, comprised
1,614 factories in December 2006 — a 4-percent year-over-year increase. However, the apparel
industry’s workforce of 25,983 employees in December 2006 represented a decrease of 4,774 employees
compared with the December 2005 workforce total.
Exports And Imports
As further evidence of the industry’s economic impact, the TDC notes that in December 2005,
there were 3,954 and 14,779 establishments dedicated to the export and import of textiles and
apparel, respectively. During that period, textile export and import establishments employed 19,356
workers. There were 97,366 employees in the apparel subsector involved in export and import
functions.
According to the TDC, which cited Hong Kong trade statistics of the Census & Statistics
Department, total exports of Hong Kong textiles were worth US$4.2 billion from January to April
2007 and US$13.9 billion in 2006 — a 0.5-percent increase over 2005. During January to April 2007,
textile exports of note were yarn, with a 26.6-percent share of total textile exports; woven cotton
fabrics, with a 23.6-percent share; and knitted or crocheted fabrics, with a 22.2-percent share.
The same products were the top three exports in 2006 (See Table 1).
In 2006, the top market for Hong Kong textiles was China, receiving 70.1 percent, or US$9.7
billion, of Hong Kong’s textile goods. Following China were Bangladesh, with imports totaling
US$408 million; and Cambodia, with imports worth US$346 million. The United States was the
sixth-ranked market in 2006, behind the aforementioned countries, Indonesia and Vietnam. Hong Kong
exported textile goods to the United States worth US$314 million that year.
With regard to apparel and apparel accessories, Hong Kong exported goods worth US$28.3
billion in 2006 — a 3.9-percent increase over 2005 — and nearly US$8 billion from January to April
2007 (See Table 2). Among specific categories of apparel, non-knitted apparel made of textile
fabrics for women and girls ranked first among all apparel exports and were worth US$7.4 million
that year. The same kind of apparel for men or boys was the second-ranking export, accounting for
12.6 percent of all apparel exports. However, “other” apparel articles made of textile fabrics
comprised 40 percent of total apparel exports in 2006.
The United States, which in 2006 imported apparel goods from Hong Kong worth US$10.6
billion, made up 37.6 percent of all apparel exports. According to the US Department of Commerce
Office of Textiles and Apparel’s June 7, 2007, Major Shippers Report, Hong Kong’s total textile
exports, including apparel, to the United States captured a 1-percent share in square-meter
equivalents and a 2.6-percent share in dollar value in April 2007. Other top markets for Hong Kong
apparel in 2006 were the United Kingdom, which imported goods worth US$2.9 billion, and China,
which imported goods worth US$1.8 billion.
On the import side, textile yarn, woven cotton fabrics, and knitted or crocheted fabrics
made up 69.7 percent of the US$13.9 billion in textile goods Hong Kong imported in 2006. Those
products were sourced primarily from China, Taiwan and the Republic of Korea. In the apparel
subsector, other articles of apparel made of textile fabrics, non-knitted and knitted apparel for
women or girls, and non-knitted apparel for men or boys made up a majority of Hong Kong’s 2006
imports. China supplied 91.5 percent of apparel imports, followed by Italy and France, with 2.1
percent and 1 percent, respectively.
Economic Shifts And Responses
As environmental regulations and production costs have increased in recent years, the number
of Hong Kong-based manufacturers that have outsourced production of lower-end products to mainland
China and other Southeast Asian countries also has grown, according to the TDC. Hong Kong textile
manufacturers thus have turned to producing high-value-added items and have undertaken
high-value-added functions such as quality control, design, development, sales and marketing.
They also have invested heavily in the latest technology to increase their product
offerings. According to ITMF, Hong Kong textile producers in 2005 added 4,826 flat-knitting
machines — the largest investment in that category — and 7,656 false-twist spindles — ranking third
behind China and India. Other investments included 7,968 short-staple spindles, 149
rapier/projectile and 20 air-jet shuttleless looms, and 141 circular knitting machines — five with
jacquard electronics.
The rise in offshore production also has caused a decline in Hong Kong apparel
manufacturers, TDC notes. Although there are still cut, make and trim arrangements, an increasing
number of Hong Kong manufacturers have taken on design, brand development, material sourcing,
logistics and quality control functions. However, in an effort to avoid the US- and European
Union-imposed quotas on mainland Chinese apparel products, many manufacturers have relocated their
factories back to Hong Kong. This move to avoid quotas led to an 18-percent increase in exports of
Hong Kong apparel during the January to September 2006 period.
Lastly, in a bid to remain relevant in the constantly changing global textile market, Hong
Kong has continued to research and develop textile and apparel technologies such as nanotextiles,
3-D fabric designs, “smart” textiles and garment technologies. Hong Kong’s Innovation and
Technology Commission (ITC) acknowledges that Hong Kong trails the United States and Europe with
regard to 3-D fabric design and simulation and innovative fabric evaluation. However, ITC also
notes the industry has developed strengths in the development of materials technologies, dyeing and
finishing technology, and apparel technologies. Those strengths certainly will come into play more
and more as the industry takes strides to flourish in the post-Multi Fiber Arrangement era.
