New industrial estates crucial for Hong Kong’s innovation goals
City officials should consider allocating more industrial land to private developers
In the Chief Executive’s last policy address, the Hong Kong government committed itself to promoting innovation and technology, triggering a public debate about how the city could ‘reindustrialise’ to achieve this goal.
The Hong Kong government unveiled plans to invest over HK$18 billion in a number of measures to support local innovation, including an expansion of the Hong Kong Science Park, as well as building advanced manufacturing centres and data centres in Tseung Kwan O.
Hong Kong’s manufacturing sector and light industries reached their zenith during the 1970s and 1980s. With production lines gradually moving north of the border during the 1990s, the city consolidated its status as a financial centre and transitioned to a service economy.
However, in recent years, production costs in China have soared, prompting some Hong Kong-based manufacturing firms to rethink their strategies.
Some have opted to relocate their core functions and high value-added processes back to Hong Kong and rebuild the “Made in Hong Kong” model. However, since the Hong Kong government set up “Other Use (Business)” zones in 2001, nearly 300 hectares of land zoned for industrial use has been rezoned for commercial use. With industrial land in shorter supply, rents have increased – a factor that has today become the biggest single obstacle to Hong Kong manufacturing companies bringing their production back to the city.