Hong Kong manufacturers relocating back to city from mainland China amid ongoing US trade war
- US-China trade war is forcing some Hong Kong businesses to relocate part of their manufacturing operations back to the city to avoid American tariffs
- Hong Kong companies are starting to develop their own brands and use the ‘Made in Hong Kong’ label to adapt to changing global supply chain
Arthur Lee Kam-hung, a Hong Kong-born engineer and businessman, finds it hard to hide from the crossfire of two competing superpowers, fearing that a prolonged trade war between the United States and China could undermine the future of the city’s electronics industry.
Despite the apparent progress in Washington last week, the interim trade agreement reached between Washington and Beijing leaves in place existing tariffs, with a comprehensive deal that would resolve the trade conflict nowhere on the horizon. US President Donald Trump has announced four batches of tariffs since July last year, pushing many Chinese companies to relocate their manufacturing bases into Southeast Asia.
Others, like Lee, have opted to return to Hong Kong, for practical reasons including the city’s skilled labour force and world-class logistics. And by creating manufacturing capacity in Hong Kong, businesses can be sure they can avoid US tariffs that would apply to their production on the mainland.
Lee’s company is planning to shift the manufacture of high-end products used in 5G base stations and autonomous vehicles to Tsuen Wan in the New Territories district of the semi-autonomous city.
Our company is in the business of technology and not politics. We don’t want to be choosing one market over the other
“Our company is in the business of technology and not politics. We don’t want to be choosing one market over the other,” said Lee, who is the CEO of Hong Kong X’tals. “So by setting up a factory in Hong Kong, we hope to clearly show that we are politically neutral.”