This Sept 20, 2020 photo shows a general view of the Victoria harbour next to commercial and residential buildings in Hong Kong. (May JAMES / AFP)

Facilitating production line relocations, exploring new overseas markets, upgrading industry technology standards and cultivating talent are the recommended recipes for the government to fortify the manufacturing sector as an economic pillar in the Hong Kong Special Administrative Region.

This is according to the interim research report released by the Federation of Hong Kong Industries on Tuesday. Big data analysis, surveys and focus group interviews provided the main sources of data gathered by the federation last year in which 231 HKSAR-based manufacturing companies were interviewed.

The report identified 23 percent of the interviewed manufacturers as being eager to establish other production lines, or that they already had established other production plants, in addition to the existing ones in the Chinese mainland

The report identified 23 percent of the interviewed manufacturers as being eager to establish other production lines, or that they already had established other production plants, in addition to the existing ones in the Chinese mainland. 

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They are also eager to transform their businesses by venturing into either upstream or downstream industries. According to the survey, more manufacturing enterprises are willing to enhance investments in research and development (57 percent), product designs (59 percent), and brand building (47 percent).

Only 13 percent of the surveyed HKSAR-based manufacturing companies have adopted automation technologies and industrial Internet of Things technologies simultaneously, the survey said. 

It revealed that 10 percent of the interviewees are considering relocating their production plants back to the HKSAR and 26.8 percent already have established production lines in the city.

Responding to the survey findings, the city’s largest manufacturing industry chamber suggested the following major strategies to the special administrative region at a time when the city’s manufacturing sector is battered by Sino-US trade differences, the pandemic and de-globalization trends such as shifting supply chains. 

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Concerning facilitating production line relocations, the HKSAR government was urged to ensure more local producers can join industrial parks established by the central government in overseas countries. The administration can liaise with Belt and Road countries to open industrial parks earmarked for HKSAR-based manufacturers.

The administration should assist manufacturers to explore more overseas markets. Measures include building up e-commerce platforms for HKSAR companies and financing platforms for small and medium-sized enterprises, facilitating mutual recognition of product safety as well as testing standards and certification between HKSAR and the other 10 cities in the Guangdong-Hong Kong-Macao Greater Bay Area, and sharing cross-boundary data such as custom clearances and goods flows to facilitate industry development.

The government was also urged to hasten the manufacturing industry upgrade by accelerating R&D commercialization. Measures to enhance the returns derived from R&D commercialization obtained by R&D professionals and permit more university staff to engage in knowledge transfer activities, should be considered.

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The HKSAR government should also allocate more resources to designated funds in new industrial research to stimulate more innovations in applied technology. The government can also consider establishing universities of applied science funded by the University Grants Committee to provide more talent for the manufacturing industry.