More Hong Kong companies expected to quit Pearl River Delta
Industry body says firms facing difficulties in region once known as factory to the world
The Pearl River Delta, once regarded as the factory to the world, will lose 10 per cent of its Hong Kong-owned factories over the next two years.
The warning came from Stanley Lau Chin-ho, a deputy chairman of the Federation of Hong Kong Industries, who added that in the past few months, several factories making watch components had closed down.
"They have been in the business for over 10 years. Unfortunately, due to the difficulties they have been facing, they are not confident they can survive. In the next one to two years, we expect more factories from watch and other industries to have the same problems," Lau said.
Hong Kong manufacturers have most of their factories in Guangdong's Pearl River Delta, where Hong Kong investment has been a driving force to make the delta the most important manufacturing base in the world.
In 2011, Lau said the delta would lose 30 per cent of its factories in three to five years.
"It is quite realistic [to assume] this will happen," he said yesterday. "We see more Hong Kong manufacturers in labour-intensive sectors considering relocating to interior regions in the mainland or Southeast Asian countries, where labour supply is abundant."
The minimum wage in Guangdong would rise 12 to 15 per cent this year, Lau said. "Fifteen per cent is quite high. It will have a great impact. Hiring in the delta will be difficult in 2013."