The local textile and garment sector has sailed through turbulent times buoyed by the quota system, an industry player said yesterday.
Dr Kenneth Wang Kuk-kei, managing director of Sterling Products in Kwai Chung, employs 6,000 people worldwide but only 100 locally. He said the quota system imposed since the late 1960s had helped the industry.
'Hong Kong, owing to its big cotton quota base, has an edge against Taiwan, which mainly manufactures synthetic products,' he said.
The US tightened documentation regulations relating to quotas in the 1980s. Under the quota system, different countries and economic blocs set limits on the quantities of goods that may be imported from producing nations.
Quotas set by the US have remained relatively stable over the past three years, going from 1.2 billion equivalent square metres in 1995 to 1.25 billion last year.
Dr Wang said his 41-year-old company had grown with the influx of migrant workers during the 1960s, but then operating costs rose considerably, causing it to lose its competitive edge. 'Wages have seen double-digit increases for the past five to six years, but productivity has not kept pace,' he said.