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Speech by SCED at IAF World Apparel Convention (English only)

     Following is a speech by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at the  IAF (International Apparel Federation) World Apparel Convention today (October 6):

Mr Masselos (President of IAF), distinguished guests, ladies and gentlemen,

     It gives me great pleasure to join you here today at the opening session of the IAF World Apparel Convention.

     The Convention is held at a different location every year.  It was last held in Hong Kong in May 1997, the year when Hong Kong returned to our Motherland and became a Special Administrative Region in China.  Time flies.  This year, we celebrated the 13th anniversary of the establishment of the Hong Kong Special Administrative Region.  Today is a good opportunity for us to have a quick look at what our apparel industry has gone through in these 13 years.

     About 76,000 people in Hong Kong were working in the apparel industry 13 years ago.  Our total exports of clothing products then amounted to US$22.9 billion.  In 2009, our total exports remained at US$22.7 billion, roughly the same level as 13 years ago.  But we had barely over 20,000 people working in the industry, which was about one-fourth of what we had 13 years ago.  Obviously, something has happened which drastically changed the landscape of our apparel industry.

     The evolution of our apparel industry began with the opening up of the Mainland economy which started in the late 70s.  The increasing economic integration between the Mainland and Hong Kong boosted the momentum of the process.  Over the years, a large portion of our manufacturing activities and jobs have been shifted across the border to take advantage of the supply of land and labour in the Mainland which directly helps to reduce production costs.  Part of the supply chain however were retained in Hong Kong namely the design and other complementary services including sourcing, R&D, marketing, finance and management.  Gradually our traders have developed competitive advantages in these areas improving the productivity of the apparel industry as a result.  

     Hong Kong's fashion sector grows to its fame as Hong Kong style establishes an exclusive position, leading the trend not only in the Greater China area, but also in the South East Asia region.  Hong Kong's fashion designers have been gaining worldwide reputation for their professionalism, creativity and ability to blend commercialism and innovation.  Medium to high-priced fashion clothing bearing Hong Kong designer labels can be found in renowned department stores all over the world.  Our new generation of fashion designers are also attracting international attention.  For example, last year, the outstanding fur design work of a local fashion student won the REMIX International Fur Design Competition, a prestigious international competition on fur design held annually in Milan.

     Apart from being a fashion design centre, Hong Kong also serves as a hub for sourcing in the global supply chain of apparel products.  Our companies are experienced in fabrics procurement, sales and marketing, quality control, logistics arrangements.  They understand well the international and national rules and regulations and play by them.  Taking advantage of our strategic geographical location and our first class transportation and communication infrastructure, the wide-ranging quality services offered by our Hong Kong companies are not easily matched elsewhere.

     Some of you may ask: if the government had any part to play in this transition process?  

     Hong Kong has consistently been ranked as the freest economy in the world by the Heritage Foundation in the last 16 consecutive years.  Our philosophy is to let market lead and business people make their business decisions.  We see our role as a facilitator working to provide a conducive environment for business to grow and prosper.  We do not "plan" the transition of the apparel industry and credits must go to all industry players.  Looking at where we are now, I think it is fair to say that our policy has served the industry and Hong Kong well.

     By its nature, fashion is an industry that thrives on designers' creativity and changing consumers' taste.  Consumers today are becoming more demanding and pricing alone is not enough to make them buy.  For the more socially and environmentally concerned, green products are surely getting their greater attention.  Catering to customers' preference with a strong and readily identified label may spell easier success.  In terms of market, Mainland China is without doubt a big potential.  With the impressive economic performance despite the global financial crisis, and the growing affluence in the major cities in the Mainland, whoever has the shrewdness of making early inroads will yield success.  

     And I cannot conclude without mentioning our free trade pact with the Mainland, the Closer Economic Partnership Arrangement, or CEPA in short.  Under CEPA, all products, including textiles and clothing products, can enjoy zero tariffs on importation into the Mainland provided that the relevant CEPA origin rules are met.  For those of you from overseas, you will be pleased to know that CEPA is nationality neutral.  Foreign companies incorporated in Hong Kong can also enjoy the full benefits of CEPA.

     Indeed, the textiles and clothing sector has been a major beneficiary under CEPA.  Since its inception, we have issued over 15,000 certificates of origins for the textiles and clothing sectors.  

     Exploration of new ventures presents challenges to the trade.  But challenges and opportunities are two sides of the same coin.  This convention provides an excellent platform for industry experts to discuss innovative ways to turn the challenges into opportunities and opportunities into business.

     I hope your exchanges are fruitful and productive.  I wish the convention every success and for those coming from abroad, I wish you an enjoyable stay in Hong Kong.

     Thank you very much.

Ends/Wednesday, October 6, 2010
Issued at HKT 11:33


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