FHKI 60th Anniversary Commemorative Album

These northbound Hong Kong industries started initially mainly as export-oriented original equipment manufacturing (OEM) labour- intensive operations in the PRD region, usually in “three forms of processing, assembly operations and compensatory trade”. Very soon clusters of a comprehensive range of different linkage industries emerged in close proximity throughout the PRD region. This is an important distinctive advantage of the PRD region that has enabled the industries operating there to attain high production efficiency with excellent rapid response capability. The scaleandsizeofHongKong industrial activitiesgrewexponentially. As a result, Hong Kong industries benefited from the economies of scale and further enhanced their price competitiveness. They were able to capture a large share of the world market, in particular, of consumer products such as toys, clothing and garments, watches, shoes and bags, electrical appliances and electronic products. The PRD region was thus known as the world’s factory. The partnership between Hong Kong and the PRD region in industrial activities also improved Guangdong Province’s industrial landscape and made it the fastest industrialising province on the Mainland. Guangdong’s relative share of industry value-added on the Mainland increased from 4.7 percent in 1978 to 11.4 percent in 2002. The flourishing industrial activities in the PRD region had profound contributions to the corresponding rapid economic growth during the period. However, Hong Kong industries maintained their regional headquarters in Hong Kong, responsible for financing and management, strategic planning, procurement of materials and acting as the brain of the companies’ global supply chains. These services were closely tied to manufacturing activities in the PRD region and stimulated the rapid development of Hong Kong’s producer services (e.g. trading, banking and finance, insurance, professional services, legal and logistics). After about two decades of speedy development, Hong Kong industries operating in the PRD region started to undertake transformation of their business models to move up the value chain: becoming “foreign invested enterprises” and engaging original design manufacturing (ODM) and original brand manufacturing (OBM) operations, and increasing sales to the increasingly affluent Mainland market. An evolving partnership between Hong Kong and the PRD region was witnessed as the Mainland economy continued to grow at an unprecedented rate. Consequently, Hong Kong industries have transformed enormously during the four decades since taking-off in the 1960s. “Made by Hong Kong” has significantly replaced “Made in Hong Kong” and Hong Kong industries were well prepared and equipped to enter the new millennium. 1990 s Federation of Hong Kong Industries 60 th Anniversary Commemorative Album 35