Clothing carrying Hong Kong brand names enjoys better opportunities on the Chinese mainland, according to an industry survey released in Hong Kong Friday (Jan 16th).

Oracle Market Research, an independent survey company commissioned by the Trade Development Council of Hong Kong, interviewed a total of 437 exhibitors and 759 buyers attending the Hong Kong Fashion Week and World Boutique this week.

The survey was conducted two weeks after the Closer Economic Partnership Arrangement (CEPA), a free trade deal between Hong Kong and the Chinese mainland came into force. Under the arrangement, a large number of Hong Kong-made clothing items now enjoy tariff-free entry into the mainland market, starting from Jan. 1, 2004.

CEPA has given Hong Kong's garment industry a further boost on the mainland. Eligible Hong Kong companies will also be allowed to engage in commission agents' services, wholesale, retail and external trade on the mainland on a wholly owned basis.

Hong Kong's clothing companies will be allowed additional market access as specific restrictions in the area of distribution services on the mainland are removed.

Comparing to clothing manufactured in the Chinese mainland, "Made in Hong Kong" clothing enjoys a 16 percent price premium, according to surveyed buyers. Surveyed exhibitors incline to produce mid to high-end "Made in Hong Kong" products for the mainland market.

Surveyed exhibitors mapped out their strategy under CEPA, which include: developing a brand and sell in the mainland market; establishing and expanding retail stores and distribution network on the mainland; producing overseas branded products in Hong Kong and sell on the mainland; assisting overseas brands to promote in the mainland; establishing new plants and increasing production lines in Hong Kong to produce "Made in Hong Kong" products and sell to the mainland using more expensive materials for production and sell to the mainland.

The survey also found that 78 percent of interviewed exhibitors and 80 percent of buyers believe that 2004 will be better than 2003 in terms of business. The result is much more positive than that of last year. In 2003, only half of the respondents were positive about market outlook.

Editor: Wing