TNAG-0939-FCO40-1158-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1981 — Page 65

THE MARKET

1 Hong Kong vies with Italy as the world's leading exporter of clothing. In 1979 the export value of 'articles of apparel and clothing accessories' made in Hong Kong was HK$20,131 million, an increase of 28 per cent over 1978 and accounting for 36 per cent of Hong Kong's total domestic exports (Appendices A and B). To help feed this major industry, Hong Kong was the world's third largest importer of textile fabrics valued at HK$7,371 million.

2 At the end of 1979 the industry was made up of 9,647 factories employing 277,270 workers, respectively 23 per cent and 32 per cent of Hong Kong's manufacturing establishments and labour force. It is estimated that 90 per cent of Hong Kong's clothing production was exported and that garments made of textile fabrics amounted to some 89 per cent of all those exported, in value HK$17,836 million.

3 For the purposes of this report the Hong Kong garments industry can be divided into roughly three sectors: mass-production; designer fashion; tailoring. The industry produces a

comprehensive range of under and outerwear (Appendix C), including nightwear, sportswear, baby clothes and industrial clothing.

4 Because Hong Kong is now 'trading up' to stay ahead of the competition from other low cost suppliers and to combat quantitative quota restrictions, some factories no longer produce for the lower end of the market. This quality trend is indicated by the numerous designer fashion houses who now have garments manufactured in Hong Kong. They include such names as Cardin, Dior, Fiorucci, Givenchy, Calvin Klein, Roland, Yves St Laurent, Oscar de la Renta and Gloria Vanderbilt.

5 Hong Kong's principal export market for clothing continues to be the United States which in 1979 took 35.8 per cent by value, followed by West Germany (17.9 per cent), Britain (14 per cent), Japan (4 per cent) and Canada and the Netherlands with 3.2 per cent each. The markets of the European Community as a whole took 38.6 per cent (Appendix D).

6 In Britain major customers for Hong Kong clothing include Austin Reed, British Home Stores, C & A, the Co-operative Wholesale Society, Debenhams, Foster Bros, Freemans, the GUS Group, Harrods, Hepworth, Liberty, Littlewoods, Selfridges, Tesco, Tootal, the Wallace Group and Winsmoor. Hong Kong factories also make for British fashion designers such as Marisa Martin and Laura Ashley. Although its market share is declining Hong Kong still accounts for about a quarter of Britain's clothing imports (Appendices E and F).

Textile fabrics used and their sources

7 The range of textile fabrics used by the garment industry in Hong Kong is comprehensive. It includes many varieties and qualities of cotton textiles, man-made fibres (mmf), mixtures, velvets, silks, worsteds, woollens etc. Although most of them are imported, some fabrics are also produced locally.

8 The bulk of the yarn spun in Hong Kong is cotton (186 million kg) followed by mmf and blended yarn (48 million kg) and woollen and worsted yarn (4.6 million kg). Most of the yarn produced is used locally.

9 As in previous years, over 80 per cent of the weaving sector's 1979 production of 868 million square metres of woven fabrics was cotton. Much of the fabric produced was exported in the piece, but local manufacturers also used large quantities.

10 Since the 1975 jeans boom, Hong Kong has been well geared to produce its own denim and corduroy. However, with a drop in demand for these two fabrics and with very competitive imports of other fabrics from neighbouring countries, Hong Kong manufacturers of textile

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