Up to 10,000 small- and medium-size enterprises (SMEs) are at risk as a result of China's accession to the World Trade Organisation and the continuing slow-down of the domestic economy, according to entrepreneurs.
They warn that opening the huge mainland market to foreign competitors will put pressure on local SMEs - forcing some to close and others to merge with competitors.
SMEs, which makes up more than 96 per cent of Hong Kong's businesses, are defined as manufacturing firms with fewer than 100 employees or non-manufacturing firms with fewer than 50 employees.
Data from the SME Information Centre, at the Trade and Industry Department, shows that at the end of June there were 300,054 SMEs, employing 1,406,301 people.
'We'll see up to 10,000 enterprises closing down, mainly in the restaurant and manufacturing industries. Also, Hong Kong enterprises are starting to merge with foreign companies,' Hong Kong Small- and Medium-Size Enterprises Association chairman Simon Shi Kai-biu said. Mr Shi, also a legislator from Kwun Tong District, said some of the closures would come within two months.
Hong Kong General Chamber of Commerce director Eden Woon also warned of a tough road ahead for SMEs.
