WASHINGTON - Hong Kong's plastics industry - which makes mostly toys - will grow slowly in 1995 because of improved trade relations between the United States and China. The eleventh-hour averting of a trade war between China and the United States on Feb. 26 means some $465 million in Chinese-made plastic items will not be assessed a 100 percent duty before entering the United States.
The United States had charged that Chinese companies illegally copy American computer software, music on compact discs and other exclusive intellectual property.
The matter is not of great interest to the Society of the Plastics Industry Inc., according to an SPI official who requested anonymity. Many of the plastic goods in question - picture frames and baseball card holders, for example - are made by U.S. companies that manufacture in China.
But resolution of the trade spat and other factors will cause a loss of at least $129.4 million in business, according to Hwang Chi-hsiung, secretary-general of the Hong Kong Plastics Manufacturers' Association.
According to an American plastic picture frame manufacturer, plastic frames make up less than 10 percent of the frame market.
Items coming from China are ``very low-end injection molded'' pieces rarely larger than 8 inches by 10 inches.
Hwang told the British Broadcasting Corp. the indirect effects of the trade war could be significant because slackness in the European and U.S. economies a year or two before the trade controversy resulted in fewer orders.
The upturn came this past Christmas, when retail business turned for the better. Hwang said he expected that there would be more orders for plastic products this year.
Huang said rising operational costs will cut profit for plastics manufacturers, mainly because shortages last year caused raw material prices to jump 50 percent. This was made worse by the greater demand resulting from expansion of plastics' use, he said.
Also, more than 90 percent of Hong Kong plastics manufacturers moved to mainland China, he said.
