Victor Lo

Victor Lo, chairman and chief executive officer of Hong Kong conglomerate Gold Peak Industries (Holdings) Ltd., made his comments in a Dec. 1 presentation at the “Design for New China Markets Conference” conference in Beijing. Lo, who also serves as chairman of Hong Kong Design Centre’s board of governors, said manufacturers in the Pearl River Delta employ 15 million manufacturing workers.

Quoting figures from a study conducted earlier this year by the Federation of Hong Kong Industries, Lo said native Hong Kong companies run 70,000 factories across the border in the Pearl River Delta, employing an estimated 8 million to 9 million workers.

But he cautioned manufacturers there not to take their position as a major manufacturing hub for China for granted.

“Further inland will become cheaper, and the Pearl River Delta must learn to do things better,” said Lo.

He cited Shandong Province as an example of a quickly growing competitor with advantages such as its proximity to Japan and Korea making the province a threat to Guangdong’s manufacturing status.

“The combination of Hong Kong and the Pearl River Delta in manufacturing will be fantastic,” according to Lo, as long as the area can improve its capabilities in design, technology and time to market.

He sees Hong Kong acting as a platform for Guangdong-based manufacturers to improve the technological and design capabilities of employees through training and education. Lo noted that Hong Kong also has the advantage of well-developed service industries, particularly in banking, transportation and education, which also makes the Pearl River Delta attractive to companies.

He agrees that some more labor-intensive manufacturing can be done more cheaply further inland, but he believes that the established base and skilled workers in the Pearl River Delta can and will attract more high-technology and design-savvy companies as long as skills among managers and workers continue to improve. In an interview with Plastics News at the Beijing conference, Lo mentioned VTech Holdings Ltd., Techtronics Industries Co. Ltd. and Oregon Scientific (UK) Ltd. as examples of companies that combine innovative technology and design and have manufacturing facilities in the area.

Imagine, he said, a city similar to Manhattan with a South Korea adjacent to it. Then, you can understand the combination of Hong Kong and a Pearl River Delta with advanced design and technology capabilities.