Annual Report 2014-15

14 FHKI Annual Report 2014-15 The year 2015 marks the 55 th anniversary of the FHKI. Chairman Stanley Lau held a press conference on 10 February 2015 to announce a series of celebration events throughout the year, as well as the first deliverable of our anniversary activities: the results of the “Made in PRD Study IV – Hong Kong Industry: The Way Forward” (The Study). Made in PRD Study Findings Since 2003, the FHKI has been conducting a series of “Made in PRD” research studies on the development of Hong Kong industries in the PRD on a regular basis. Last year, with the generous sponsorship of HSBC Commercial Banking and the Hong Kong Polytechnic University (PolyU), we engaged Dr Thomas Chan Man-hung, Head of the China Business Centre of the PolyU, to undertake the fourth PRD Study to look into the challenges faced by Hong Kong manufacturing enterprises in the PRD since the 2008 financial tsunami and examine the direction of their future development. Amidst rising challenges in terms of increasing labour costs, shortfall of workers, labour disputes and more onerous regulatory requirements, the Study findings showed that Hong Kong enterprises further slowed down their pace of investment in the PRD. They had also made significant adjustments, including reducing the size of the workforce, substituting Hong Kong managers with Mainland staff, using more Mainland raw materials and equipment, expanding marketing efforts, investing more in R&D, and relocating some of their production lines. The study also found that there was a weakening in the connections between Hong Kong-funded enterprises and Hong Kong’s logistics and production services, and on one hand the city’s economic and trading system on the other, as enterprises are shifting their import and export activities to the Mainland and increasing the ratio of procurement in the Mainland. Their most prevalent business strategies for the next few years would be increasing automation, improving product design, brand building, and strengthening R&D and the use of technology. Despite rising challenges, most respondents still prefer to continue their operations in the PRD, but some intend to locate some of their production lines to outside PRD and abroad. In terms of financing, most Hong Kong enterprises operating in Celebrating our 55 th Anniversary 慶祝工總成立55載 Operational Review 工作回顧 A cocktail reception for consuls-general and international partners to celebrate the Federation’s 55 th anniversary. 多國領事與國際夥伴出席工總酒會，慶祝工總成立55周年。