Hong Kong Manufacturing SMEs: Preparing for the Future

76Industry players are confident that the ChineseMainland market will keep growing and they seestrong opportunities in the automobile, machinery,and electronic industries. 143 For instance, to produceone model of car requires 1,500 mould and diesets. 144With China selling 13.64 million motorvehicles in 2009 alone, 145 this is a large and growingmarket. This should provide ample opportunityfor Hong Kong companies that can find the rightniches going forward. However, Hong Kong’sposition in this industry is one that could comeunder significant competitive threat even as marketopportunities expand.143 Interview with Hong Kong Mould & Die Council, 9 April 2010.144 Advertising page, Hong Kong Mould & Die Council AnnualReport 2009.145 Report on the Work of the Government 2010, Wen Jiabao,delivered at the Third Session of the Eleventh NationalPeople’s Congress on 5 March 2010.146 Hong Kong Census and Statistics Department data on“Machinery, equipment, apparatus, parts and components,n.e.c”, 2009.147 Hong Kong Census and Statistics Department, Hong KongMerchandise Trade Statistics 2009, Domestic Exports and Reexports,Trade category UN SITC rev.3 code 7491 – Mouldingboxes for metal foundry; mould bases; moulding patterns;moulds for metal (other than ingot moulds), metal carbides,glass, mineral materials, rubber or plastics.Basic Facts about the IndustryThe Gross Industrial Output (GIO) for Hong Kongwas HK$5.4 billion in 2008 for the “Machinery,equipment, apparatus parts and components”sector which includes moulds and dies. There were5,591 employees in the sector in Hong Kong withan estimated average annual wage of HK$156,680.Wages were approximately 20 per cent of totalcosts for the sector. 146 Wages for the sector in HongKong are five times those for the sector in Chinaas a whole. This is likely explained by general wagedisparities between Hong Kong and China, theemployment of more senior staff in Hong Kong,and the fact that higher value end products areproduced in Hong Kong with corresponding higherquality and more costly labour inputs.Hong Kong’s total domestic exports for moulds anddies in 2009 were HK$188 million, a 13 per centdecrease from the previous year. Re-exports fromHong Kong were HK$2.9 billion or 0.12 per cent oftotal re-exports. No data is available for MainlandChina based processing and non-processing tradecompanies. 147 Japan was the world’s largest mouldand die exporter from 1991 to 2008, while Chinahas been among the top three since 2007. Thelargest importers of moulds and dies are the US,China, and Mexico.Exhibit 45. Average Monthly Wages for theSector in RMBRegionAverage Monthly WagesHong Kong 11,489YRD 1,881PRD 2,439China 2,200Source: Foshan, Dongguan, Shenzhen, Huizhou, Taizhou (JS), Nantong,Shaoxing, and Jiaxing City Statistical Yearbooks, 2009, China StatisticalYearbook, 2009.