HK factory owners are debating options of building new bases in Southeast Asia,Emma Dai reports
Finally, Felix Chung Kwok-pan, chairman of Hong Kong Apparel Society and Legislative Councilmember in the special administrative region, heard some good news. The land he has beennegotiating over in Myanmar had eventually been secured after countless visits and calculations.The first batch of Hong Kong garment makers is now moving to the country.
"We will be cutting the ribbon in the middle of next year if everything unfolds smoothly," saidChung. "The infrastructure work for the industrial park is expected to be finished at the end of thisyear, and we will move in and construct our own factories, which will not take long."
The land Chung refers to is in Thilawa Special EconomicZone, Myanmar's flagship economic testing ground in theoutskirts of Yangon. The industrial park is being jointlydeveloped by Japanese companies and the Myanmargovernment. In March, a group of 12 Hong Kong garmentmakers signed a letter of intent for a 40-hectare plot in thezone. Final terms are still under negotiation, but up to $3million of investment each is expected initially.
"That is not enough," Chung said. "Another piece of landwe've secured is in Bago province next to Yangon. It's 121hectares and will be available next year. Many other apparelmakers are thinking about moving there. About 30 HongKong garment factories are opening up in Myanmar."
The 50-year-old owns a knitting factory in Dongguan, but nowconsiders the mainland to be off-puttingly pricey.
"The mainland has become too expensive. There are nocompetitive reasons to be based there," he said.
The main concern is the cost of labor. According to Chung, the monthly salary in Myanmar is$100 a worker, while in Guangdong it has climbed sharply in recent years to as high as $600.
"As indicated by the Third Plenary Session (of the 18th Central Committee of the CommunistParty of China) last year, mainland workers should see their incomes doubled by 2020. That's$1,200 six years later - or even more," Chung said.
Furthermore, factory owners face a demographic problem. According to an Invesco reportpublished in April, from 2010 to 2020, the working-age population in popular Southeast Asiancountries, including Malaysia, Thailand, the Philippines, Indonesia, Vietnam and Cambodia, willincrease by 23.5 million, while China will lose 31.7 million workers.
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