Date
26 July 2017
Providing incentives for firms to set up R&D centers can help Hong Kong boost its product design capability and revive the manufacturing sector.
Providing incentives for firms to set up R&D centers can help Hong Kong boost its product design capability and revive the manufacturing sector.

Manufacturing: Why HK must focus on the partnership model

Manufacturing used to account for a quarter of Hong Kong’s economic output at one time, but its share has now fallen to just around one percent. 

To revive the sector, businessmen are calling on the government to step up support through enhanced land supply and tax breaks.

While that is certainly one way to do it, a joint e-bus project of China Dynamics and Hong Kong Productivity Council (HKPC) shows that there is another good alternative: “Designed in Hong Kong, Made in China”.

Hong Kong may lack the space and cheap labor to become a manufacturing base again, but by taking advantage of the local R&D capability, branding advantage and better protection for intellectual property, the city can still play an active role, especially in manufacture of high-tech products.

In the e-bus project, HKPC spearheaded the design process and came up with proprietary technology on motor and battery controls to ensure maximum energy efficiency and mileage.

China Dynamics, on its part, will mass-produce the model in Chongqing following its acquisition of 70 percent interest in Chongqing Suitong Industrial Co., which is now applying for a full license for new-energy vehicle production.

The e-bus has been road tested in China and is now going through field tests in the more challenging driving environment of Hong Kong. Bus operators here will provide feedback which can be used to further optimize the design.

China Dynamics has secured its first order — 90 units — from Xingtai municipal government in Hebei.

Leveraging on its mainland network, the Hong Kong branding and the unique technology, the HK-designed e-bus stands a good chance of winning a bigger share of the mainland market.

The HK-China partnership approach is getting popular in ventures involving products that require higher technology input, like smart devices, wearables and drones. Companies typically employ a research team in Hong Kong and partner with mainland factories to get the production done.

For companies with strong research capability and unique knowhow, this could be an ideal way to take advantage of the best of Hong Kong and China.

While it’s difficult to see factories mushrooming in Hong Kong again, we can still revive the sector by building up the city as an R&D hub and creating more high-paying manufacturing-related jobs.

– Contact us at [email protected]

RC

EJ Insight writer

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