A Tale of Two Industries: The Restructuring of Hong Kong's Garment-Making and Electronics Industries

Abstract

In different ways, newly industrialised economies (NIEs) in East Asia are restructuring their industries in response to changes in their comparative advantages and to the changing environment of the global economy. In this paper, an attempt is made to examine the case of Hong Kong through intensive case studies of its garment-making and electronics industries. It is argued that the way the manufacturing industries respond to rising production costs, increasing protectionism, and growing competition from other NIEs is essentially shaped by the ‘politics of production’, at the structural, institutional, as well as organisational levels. With a noninterventionist state, the dominance of small local capital, the arms-length relationship between industrial and financial capital, and the underdevelopment of shop-floor unionism, Hong Kong's manufacturing responds to the changing business environment by developing flexible, labour-intensive production strategies. The success of such strategies hinges upon the ability of the industries to find niches in the world market of consumption which is increasingly characterised by rapid changes in styles.