Worst over as delta plants see orders rebound
Despite companies reporting 10 per cent rise in demand, industry chief says Pearl River Delta firms should continue seeking cheaper sites
Hong Kong manufacturers in the Pearl River Delta said the worst times might be behind them as orders rose more than 10 per cent last month and more invoices were in the pipeline.
The Federation of Hong Kong Industries, however, said manufacturers should continue to relocate to cheaper countries as escalating costs in the Pearl River Delta could eventually drive out even the strong ones.
But moving to less prosperous nations was not without risk as the federation's vice-chairman Stanley Lau Chin-ho warned of hidden costs from loss of productivity ranging from union protests to teeth inspections by human rights inspectors to determine the age of workers.
"In Bangladesh, for example, human rights groups regularly check for child labour. Dozens [of workers] are selected for teeth inspection upon every visit and the doctor charges a couple of hundred US dollars for testing each tooth," Lau said.
While Guangdong has lowered its trade growth forecast this year to 5 per cent from an original 7.5 per cent, Lau expected Hong Kong manufacturers in the delta to see a mild double-digit growth in exports as orders had flooded in from the United States, Europe and Middle East over the past two months.
"Retailers were over-cautious last year but the markets weren't actually that bad. Now they have used up most of their inventories," he said.