Textile quotas were removed from WTO members on the beginning of 2005 in conformity of the Agreement on Textiles and Clothing (ATC). However, opposition to the removal of quotas grew across the US and the EU. In the following months, China reached agreements with the EU as well as the US in the months of June and November 2005, respectively. The China-US accord, in effect beginning in January 2006, governs the exports of of 21 groups, which comprise 34 types of Chinese clothes and textiles to the US in the period 2006-2008. The China-EU accord, in effect in June 2005 covers 10 different categories in Chinese exports of clothing and textiles to the EU in 2005-2007.
On the contrary, the mainland as well as Hong Kong agreed in October 2005 to further open the market on the mainland in favor of Hong Kong companies under the third stage of Mainland as well as Hong Kong Closer Economic Partnership Arrangement (CEPA III). Alongside other products from Hong Kong origin, the mainland has agreed to offer any product that are of Hong Kong origin, including clothing items, a tariff-free treatment from January 1st, 2006. Based on the procedure outlined the products that do not have current CEPA regulations of origin will be treated with no tariffs upon the application of local manufacturers and on the CEPA rule of origin being agreed upon and fulfilled.
Hong Kong clothing companies are highly regarded for ODM or OEM production. They can provide high-quality clothing items in a shorter lead times, because retailers and importers from abroad demand clothing manufacturers to improve the supply demon slayer clothing chain management in order to make sure that the items ordered arrive on the shelves on time. More and more, Hong Kong clothing companies particularly, the well-established ones especially have expressed an interest in promoting brands.
The total value of Hong Kong’s exports to clothing increased year-on-year by 9percent in the initial 11 months of 2005. Although Hong Kong’s reexports of clothing increased by 20%, its domestic exports declined by 14 percent. In the initial 11 months of 2005 Hong Kong’s exports of clothing towards Europe, the US and EU increased by 11 percent and 18%, respectively. While Hong Kong’s exports of clothing to Japan decreased, exports towards the Chinese mainland decreased by 11%.Industry HighlightsThe industry of clothing is one of the main manufacturing sectors in Hong Kong. The gross output of the industry is among the most productive of all manufacturing industries with a total of HK$35.9 billion during 2003. It is the most significant manufacturer in Hong Kong, with 1,673 establishments employing 28,752 employees in June 2005. It is also the largest producer exports to the domestic market, making about 40% of total exports during the beginning of the year.
Hong Kong’s geographical boundary has not impeded the growth of the forward-looking fashion industry. A majority of manufacturers have established offshore production facilities as a way to cut expenses. Moving manufacturing facilities offshore has led to an ongoing decline in the number of garment manufacturers located in Hong Kong.
Hong Kong is not only a major production center, but also an important hub for clothing imports globally. Companies that deal in clothing from Hong Kong are experienced in purchasing fabrics as well as sales and marketing logistics arrangements, quality control fashions, and laws and rules and regulations. The professionalism they exhibit and the services that they offer cannot be matched anywhere else. With 15,190 establishments that employ 95,889 employees They make up the largest group of companies involved in trade between import and export across Hong Kong.