The fea­si­bil­ity of a whole­sale mar­ket in HK

The Pak Banker - - Front Page -

THE Hong Kong Polytech­nic Univer­sity will con­duct strate­gic re­search on “cre­at­ing a pro­fes­sional whole­sale mar­ket in Hong Kong”. The re­search is sub­si­dized by the SME De­vel­op­ment Fund of the Trade and In­dus­try Depart­ment.

That it’s es­sen­tial for Hong Kong to de­velop its whole­sale mar­ket has been cir­cu­lat­ing among busi­ness cir­cles for years. There was no re­sponse from the gov­ern­ment, how­ever, un­til Le­ung Chun-ying as­sumed of­fice as chief ex­ec­u­tive. The new HKSAR gov­ern­ment is fi­nally will­ing to pro­vide fi­nan­cial sup­port to the project. It is also a ful­fill­ment of a prom­ise in CY Le­ung’s man­i­festo that the gov­ern­ment will take steps to pro­mote whole­sale busi­nesses.

It is uni­ver­sally ac­knowl­edged that our city is el­i­gi­ble for de­vel­op­ing a whole­sale mar­ket - we can ob­tain a large amount of re­sources from the main­land; we have ex­tremely con­ve­nient trans­porta­tion both within the city and points be­yond. Our sys­tem of com­mer­cial law is well-de­fined. We have a rep­utable busi­ness en­vi­ron­ment. All these ad­van­tages have al­ready qual­i­fied Hong Kong to be a ma­jor dis­tribut­ing cen­ter.

Ac­cord­ing to a pre­lim­i­nary study, five whole­sale busi­nesses are unique to cer­tain dis­tricts, in­clud­ing ap­parel and tex­tiles in Che­ung Sha Wan, jew­elry in Hung Hom, elec­tron­ics in Sham Shui Po, mis­cel­la­neous goods in Kwun Tong, and fur­nish­ings in Wong Chuk Hang.

The pro­posal for a pro­fes­sional whole­sale mar­ket was put for­ward in the first place for its com­mer­cial value and fea­si­bil­ity, but in­evitably, de­vel­op­ing that mar­ket is a sub­jec­tive mat­ter. In this case, the gov­ern­ment should en­trust an aca­demic in­sti­tu­tion to carry out ob­jec­tive re­search to as­sess the fea­si­bil­ity of de­vel­op­ing a mar­ket in the five cat­e­gories, us­ing data from dif­fer- ent di­men­sions and ac­tual con­di­tions.

Some would ask about the eco­nomic re­turns. There is no ex­ist­ing data, but we can use the fig­ures from neigh­bor­ing ar­eas for ref­er­ence. Guzhen Town in Zhong­shan is dubbed as the China Lighting Cap­i­tal. With a pop­u­la­tion of only 150,000, there are as many as 7,497 lighting mer­chants in the town and the prod­ucts are pop­u­lar world­wide. Last year, the gross prod­uct of its lighting fit­ting and equip­ment in­dus­tries reached 17.08 bil­lion yuan and the to­tal ex­port was 3.5 bil­lion yuan.

Hu­men Town, within the bor­ders of Dong­guan city, is a thriv­ing city crowded with con­sumer goods facto- ries, es­pe­cially fa­mous for its ap­parel in­dus­try. Till the end of 2011, there were 2,346 man­u­fac­tur­ing and ap­parel pro­cess­ing en­ter­prises in the town, em­ploy­ing 200,000 work­ers, pro­duc­ing a gross in­dus­trial out­put value of 20 bil­lion yuan.

Busi­ness­men are urg­ing that Hong Kong be­come a pro­fes­sional whole­sale mar­ket. This is not only for their own in­ter­ests, but in the ex­pec­ta­tion of de­vel­op­ing the en­tire econ­omy with in­creased em­ploy­ment, if the project is suc­cess­ful.

Since the 1970s, the la­bor-in­ten­sive man­u­fac­tur­ing in­dus­try was moved north­ward on a large scale, cre­at­ing in­tri­cate in­flu­ences on the city: on the one hand, Hong Kong is be­com­ing trans­formed into a ser­vice-ori­ented city, co­or­di­nat­ing with the man­u­fac­tur­ers in Guang­dong to boost a bi­lat­eral econ­omy; on the other hand, Hong Kong has failed to open up in­dus­tries that are tech­nol­ogy or cap­i­tal in­ten­sive, re­sult­ing in large pop­u­la­tion of un­qual­i­fied, semi-skilled and un­skilled work­ers. The cur­rent ma­jor so­cial con­tra­dic­tion is the low-in­come stra­tum’s dif­fi­culty in find­ing proper jobs. The de­vel­op­ment of whole­sale mar­kets can solve the prob­lem; fur­ther­more, it will also lead to an abate­ment of pop­u­lar dis­con­tent.

Al­though highly in­dus­tri­al­ized, Hong Kong’s SMEs ac­count for more than 90 per­cent of the city’s com­pa­nies. With 300,000 en­ter­prises em­ploy­ing more than a mil­lion peo­ple, these are the back­bone of our econ­omy. How­ever, in the face of eco­nomic re­ces­sion in Western coun­tries, many SMEs are strug­gling to sur­vive. So the gen­eral hope is that the re­search on a pro­fes­sional whole­sale mar­ket can pro­pose con­crete sug­ges­tions to the de­vel­op­ment of cer­tain whole­sale mar­kets for small com­pa­nies to fol­low.

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