Hong Kong Manufacturing SMEs: Preparing for the Future

78Exhibit 50. The Mould and Die Sector of Top Three Provinces (January-November 2008)Establishments Employment GIOValue Percentage (%) Value Percentage (%) Value (RMB billion) Percentage (%)China 1,932 100.0 348,065 100.0 90.87 100.0Guangdong 456 23.6 126,025 36.2 26.23 28.9Jiangsu 302 15.6 43,112 12.4 20.64 22.7Zhejiang 379 19.6 81,624 23.5 10.41 11.5Notes: Figures are of state-owned enterprises and non-state-owned enterprises with annual sales of RMB 5 million. Figures are preliminary.Sources: National Bureau of Statistics of China; China Mechanical Electrical Data Online.In recent years, China has grown into a majorproducer in the sector. In 2009, in the absence ofJapan’s statistics, China reported higher imports andexports for moulds and dies than any other country,with exports of US$1.7 billion and imports ofUS$1.2 billion. 148 The Pearl River Delta and YangtzeRiver Delta regions accounted for two thirds ofChina’s total mould and die output in 2007. 149 Thelargest producer, exporter, and importer of mouldand die products in China is Guangdong. In 2009,Guangdong exported US$756 million of mouldsand dies, 42 per cent of China’s total, and importedUS$368 million moulds and dies, 19 per cent ofChina’s total. 150148 UN Commodity Trade Statistics Database, category 7491(SITC.3). comtrade.un.org.149 www.cdmia.com.cn.150 Trade statistics the mould and die sector for individualprovinces of China may not all fall exactly into the UN SITCcategory of 7491 due to anomalies in the compiling ofChina’s statistics.151 “Current status and development trend for China Mould andDie industry”, Speech delivered by Cao Yan’an, Executive VicePresident of China’s Mould and Die Council, on InternationalMould Exhibition in Frankfurt, 2007. www.cdmia.com.cn.152 www.mymould.net.cn.153 News from the thirteenth China International MouldTechnology and Equipment Exhibition, 2010. www.mjcy.ibicn.com.154 Introduction of Hong Kong Mould & Die Council, www.industryhk.org.Domestic and export sales of mould and dieproducts for Mainland China grew at an annual rateof 20 per cent from 2000 to 2007, 151 but growthslowed in 2008 to 2009 as a result of the globalfinancial crisis. Sales in 2009 totalled RMB 100billion, 152 but sales in the first four months of 2010reached just under RMB 100 billion. 153 The domesticmarket is approximately seven times the size of theexport market.Issues for Hong Kong Mould and DieManufacturersHong Kong owned mould and die firms thatmanufacture in the Chinese Mainland haveadvantages in marketing, in implementinginternational business practices, and in maintaininggood customer relationships over the long termversus Mainland competitors. They also tend to bemore flexible, make decisions faster, be quicker toadopt new and suitable technologies, and respondto market changes rapidly. However, Hong Kongowned firms that manufacture in the Mainlandhave relatively high costs, are less aggressive thanMainland Chinese firms, and find it harder to obtainfinancing in the Mainland than their Chinese peers.Buyers in the mould and die industry are highly pricesensitive and competition from Mainland Chinaowned mould and die companies has intensified.The global financial crisis affected Hong Kongmould and die firms supplying traditional exportsectors like toys, home appliances, electronics,and computer peripherals. 154 With lower exportsin these markets, mould and die firms were put