Why Hong Kong manufacturers struggle to revitalise factories in China’s Greater Bay Area
- Hong Kong manufacturers with operations in the Greater Bay Area face challenges ranging from burdensome policies to rising costs, a new report says
- Companies also worry about upgrading facilities in the mainland due to risks in the global business environment
Hong Kong manufacturing firms with operations in China’s Greater Bay Area are struggling under the weight of burdensome regulations and are reluctant to make long-term investments to upgrade facilities because of uncertainty in the global business environment, according to a new report by the Chinese Manufacturers’ Association (CMA) of Hong Kong.
The CMA, in conjunction with Lingnan University of Hong Kong, conducted interviews with 400 mostly small and medium-sized companies headquartered in Hong Kong, but with manufacturing bases in Dongguan, Huizhou, Guangzhou and Shenzhen.
Despite Beijing’s plan to turn the area into a leading source of industrial development, the survey highlighted the difficulties that many Hong Kong-based businesses face. Among the challenges are rising operating costs, high taxation and administrative fees, rapidly changing regulation, and piracy problems in the mainland.
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Some 81 per cent of companies said taxation was cumbersome and administrative charges were excessive, while 83 per cent said they had issues with China’s constantly changing environmental, trade and investment policies. About 80 per cent said labour shortages were a problem.