Cross-border taskforce to help factories hit by new export rule
Chief Executive Donald Tsang Yam-kuen and Guangdong Governor Huang Huahua have agreed to form a cross-border taskforce to help about 30,000 Hong Kong-owned processing factories hit by the mainland's new export rules.
The taskforce, aimed at helping manufacturers move up the technology ladder and high-value production chain, would hammer out details of how to assist in the transition, Mr Tsang told the 10th plenary session of the Hong Kong-Guangdong Co-operation Joint Conference.
In a move to rein in its swelling trade surplus, soothe international trade friction and cut pollution, Beijing has ordered all exporters to pay as a deposit half the amount they spend sourcing 1,853 raw materials such as metals, plastics and textiles for production into semi-finished goods.
The move will tie up exporters' funds, hurting their cash flow and profitability.
The number of raw materials subject to restriction will be expanded to about 5,000 eventually, according to some trade organisations.
The latest agreement comes on top of a taskforce the Hong Kong government set up last week, with about 10 members comprising government officials and industry unions due to meet today for the first time. They will assess the impact of the rule on the livelihood of Hong Kong manufacturers and draw up support measures.
Secretary for Commerce and Economic Development Frederick Ma Si-hang said last week the taskforce would help with communication between the mainland authorities and Hong Kong manufacturers.
It planned to help seek mainland bank loans for manufacturers, play a bridging role in communication between Beijing and Hong Kong manufacturers and offer advice on how to improve technology levels, Mr Ma said.
A fund has been made available for small and medium-sized enterprises to help meet environmental requirements across the border.
Michael Yu Lee-ming, chairman of the Hong Kong Metals Manufacturers Association, urged Mr Tsang to fight for an extended grace period of six months instead of one month from the announcement of the rule on July 23. The regulation will be enforced on August 23.