Driven by the open economic policies of China, the economy of Hong Kong has been undergoing structural changes since the 1980s. Among other changes, many Hong Kong manufacturers have relocated their manufacturing processes to the mainland of China (the Mainland). Some import and export firms of Hong Kong also operate factories in the Mainland one after another. Through the sub-contract processing arrangement in the Mainland, Hong Kong entrepreneurs have successfully reduced the costs of manufacturing by taking advantage of the large base of labour and land resources in the Mainland. Many of the firms which have moved their manufacturing processes to the Mainland continue to operate in Hong Kong, in the form of import and export firms. These firms also provide manufacturing-related technical support services, e.g. product design, sample and mould making, and production planning, to the associated manufacturing firms in the Mainland.
Feature articles addressing this subject have been published regularly in this Digest since 1995. This article provides the latest information on the related development.