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Last month, a garment development council was created by some parties from the clothing industry, aimed at convening the counter-flow factory owners in the business, to establish a Hong Kong-version of Seoul's Dongdaemun Market.

I am extremely glad to see this move in the garment industry. It is a totally feasible plan to realize, provided the SAR government fully supports an advantageous environment for the development of a wholesale clothing industry.

In fact, the earliest proposals for developing wholesale markets were brought to government attention several years ago by business circles. Hong Kong has fundamental conditions beneficial to such an aim; it is free of foreign-exchange control, free of added-value tax and allows freedom of import and export of goods. It has convenient transportation and unimpeded logistics (the recent container terminal labor dispute was an exceptional case), comprehensive and advanced commercial laws, and reputable goodwill. The integration of all these factors is the best understructure for a wholesale goods distribution center.

For many years, the import and export trade and retail trading in Hong Kong have been prosperous; whereas, the wholesale industry, for a long time, has been confined and underdeveloped. It is regrettable that Hong Kong's superiority has not been functioning adequately. This is also the reason why some business organizations have sought different measures to contribute to wholesale market development.

Last November, the Hong Kong Chinese Importers' & Exporters' Association (HKCIEA) commissioned the Hong Kong Polytechnic University to conduct research on "establishing Hong Kong's professional wholesale markets". They studied the feasibility of promoting professional wholesale markets based on the current operation, retail and wholesale of manufacturing industry in the city. The research will soon be published so that Hong Kong companies can use it as a reference to help with their businesses.

The research's focal point concerns industries with most potential to develop into a wholesale market. Five categories are eligible: 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. Cheung Sha Wan Road in the Sham Shui Po district is ready to take the lead, because it is already a distributing center for apparels, which is an embryonic form of wholesale market, and also because the apparel and textile wholesale market has a lower threshold than other industries, which makes it easier to attract more SMEs and workers. Average monthly apparel and accessories' exports total HK$14.65 billion. If the wholesale market is successfully established, it is estimated exports will increase by 20 percent - gaining more than HK$2.9 billion per month in the garment industry - and will create numerous jobs.

That "the government will take steps to promote wholesale businesses" is one of the promises Chief Executive Leung Chun-ying made in his manifesto. At the moment, the ambitious businessmen in the garment industry have taken this to heart and established the council. The government should seize this rare chance to take advantage of their enthusiasm and aggressiveness, cooperate with companies and organizations, thereby transforming Sham Shui Po into Hong Kong's Dongdaemun. This can also be regarded as the first touchstone for promoting wholesale industry.

The wholesale market is theoretically based on the scale economy, so it also needs many places for distribution. As far as I know, the council has proposed the plan to some government officials, and although they support the proposal, the council said that getting land use approval has become more and more difficult from the government. Fortunately, many industrial buildings are located in the district, and as long as the SAR government eases restrictions in revitalizing buildings, they could be the manufacturing and logistics bases of the wholesale market, providing precious lands for developing a Dongdaemun in Hong Kong.

The author is vice-president of the Chinese Manufacturers' Association of Hong Kong.

(HK Edition 05/10/2013 page1)