Industrial Relocation of Hong Kong
The first factories were relocated to Mainland China in the late 1970s.
The relocation trend reached its peak in the mid-1980s.
By the 1990s, over 80% of the factories had been relocated to Mainland China.
The value of domestic exports continued to decrease while that of re-exportation from Mainland China increased drastically.
In the toy industry, only 7% of the value of exports was gained by domestic exports, while 93% was re-exported from Mainland China.
Labour-intensive industries were relocated to Mainland China.
Factors of Relocation to Mainland China
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Decreasing competitiveness because of increasing land rents and labour costs
In the 1980s, the labour-intensive industries of Hong Kong, which depended on the city's low costs to remain competitive, faced the problem of increasing land rents and labour costs.
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Increasing protectionism of Western countries
{rivileges was removed and extra restrictions were placed on Hong Kong products.
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Advantages in Mainland China
The economic reforms in Mainland China provided a favourable condition for building factories there.
Mainland China had labour and land and looser pollution control than Hong Kong.
The average daily wage of Hong Kong was HK$65 in 1981, compared to HK$2 in Guangdong in 1980.
Mainland China's infrastructure and facilities were less developed than Hong Kong, further cutting costs.
It also has a lot of flat land for industrial development and a large local market.
Source: https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong
Location of Hong Kong Factories in Mainland China:
The Pearl River Delta
Most factories relocated to the Pearl River Delta.
The roads, ports and communication networks of the Pearl River Delta were rapid, and places such as Guangzhou and Foshan had good light industry bases.
Source: https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong
Location of Hong Kong Factories in Mainland China: Guangdong
Among the relocated factories, 94% relocated to Guangdong from 1989 to 1992, in which 43% relocated to Shenzhen and 17% to Dongguan.
Jewellery Industry was relocated in Mainland China
In the 1990s, the jewellery industry moved most of their manufacturing process to Mainland with the exception of the most valuable jewellery production.
Source: https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong
Reasons of factories not relocated to Mainland China
Some factories remained in Hong Kong, either because of
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Importation quotas or limits on place of origin.
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Only Hong Kong had the technology required.
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Industries that produced a small number of high-quality goods need not be relocated.
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Some factories had overseas branches.
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Family workshops stayed in HK.
Some industrialists relocated their factories to nearby countries such as Thailand, India, thePhilippines, Myanmar, Bangladesh, Vietnam, Indonesia, and Malaysia.
Source: https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong
Impact of Industrial Relocation
Upgrading industries
The labour-intensive industries of Hong Kong were turned into capital-intensive and technology-intensive industries.
Improving Environment of HK
The environment of Hong Kong has improved while that of Mainland China is heavily polluted. The Pearl River Delta faced serious water pollution and much farmland was turned into industrial uses. Consequently, local governments of South China passed laws to restrict industrial pollution.
Improving the Livelihood of People in Mainland China
Many people no longer need to farm for a living. In 1987, over a million workers were employed by Hong Kong industrialists in Mainland China. Local governments in China earn money, which are used to improve the infrastructure of China, through land rent and taxes. Therefore, the economy of the Pearl River Delta was boosted alongside the improvement of living standards.
Tertiary Industry in HK Rose (Service Industries Rose)
The service sector continues to prosper to this day. In 1980, the tertiary sector took up only 48.4% of Hong Kong's employment structure. By 2008, 87.1% of all employees worked in the service industry while employee rates of the manufacturing industry dropped to 4.6%. The relocated factories needed support services including shipping, insurance, and above all, finance. Due to more people working in the tertiary sector, Hong Kong's economy grew increasingly reliant on service industries.
The finance and real estate industries bloomed in the 1990s. However, the dependence on such industries caused a loss of competitiveness between products produced by Hong Kong-based manufacturers and those from the international market.
Knowledge-based, High-technology and Higher-value-added Industries are Developed
The other Asian Tigers had developed capital-intensive industries such as crude oil, computers and heavy industries. As a result, the government of Hong Kong has tried to develop knowledge-based, high-technology and higher-value-added industries.
High-technology training programmes have been provided as well as courses related toinformation technology and biotechnology. Land was used for high-technology industries, notablyCyberport. Research centres have been set up to support such industries, notably the Hong Kong Science and Technology Park.
High-technology exports took up one-third of Hong Kong's total exports in 2005. Manufacturing workers who are unskilled in other areas are unemployed as a result of industrial relocation. To aid them, the government provided retraining programmes, allowing them, especially those in the tertiary industry, to get new jobs.
Source: https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong
2000
Table : Sectoral Employment Distribution
　　　　 Percentage
Industry
Q1 Q2 Q3 Q4 　
Manufacturing 6.5 6.6 6.2 6.5
Service industries(3) 83.4 83.0 83.4 83.2
Others 10.1 10.4 10.4 10.3
2014
Industry
Q1 Q2 Q3 Q4　
Manufacturing 2.9 2.9 2.9 2.6
Service industries(3) 88.6 88.5 88.1 88.6
Others 8.4 8.6 9.0 8.7　
Source:
http://www.censtatd.gov.hk/hkstat/sub/sp452_tc.jsp?productCode=D5250016