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Plastic products in same dire situation as most Hong Kong exports

by Jeffrey Lam
Mr. Jeffrey Lam is Vice Chairman of Hong Kong Shippers' Council, representing the HK Plastics Manufacturers Association of which he is Chairman.
He is Managing Director of Forward Winsome Industries Ltd, a Hong Kong toy manufacturer with operations in Hong Kong, China and Thailand. An active public and community servant, Mr Lam is Deputy Chairman of the Federation of Hong Kong Industries, General Committee Member of Hong Kong General Chamber of Commerce, Director of Chinese Manufacturers' Association of Hong Kong, General Committee Member
of Hong Kong Exporters' Association, Member of the HKSAR Business Advisory Group, Member of the HKSAR Transport Advisory Committee, Member of the Hong Kong Committee for Pacific Economic Cooperation, Member of the Hong Kong/Japan Business Cooperation Committee, Member of the Hong Kong Export Credit Insurance Corporation Advisory Board and Chairman of the Quality Taxi Services Steering Committee. He is Honorary President of the Toys Manufacturers' Association of Hong Kong, Member of the Hong Kong Toys Council Executive Committee, Member of the HKTDC Toys Advisory Committee, Chairman of the HKTDC Hong Kong Houseware Fair and Hong Kong Gifts & Premium Fair 2002 Organizing Committee and Court Member of Hong Kong Polytechnic University. In 1989, he was awarded the Hong Kong Young Industrialists Award, appointed a Justice of the Peace and awarded an MBE in 1996. He received the Hong Kong Toy Industry Outstanding Award in 1999. He is also the Honorary Consul of the Republic of Estonia. In Mainland China, Mr Lam is a Director of the China Overseas Friendship Association, a Committee Member of the Chinese People's Political Consultative Conference in Guangxi Zhuang Autonomous Region and also an honorary citizen of Nanhai. Mr Lam holds a BS in Mechanical Engineering from Tufts University, USA.

2001 was a dismal year for Hong Kong exports. Plastic product results did not paint a rosy picture either as they shared the same situation as majority of the territory's export products. The industry experienced a decrease in all periods, except for a mild 0.5% drop in the first quarter, compared to results for 2000.

The US economic downturn that started in the beginning of 2001 badly affected US consumer confidence and correspondingly hurt plastic product exports from Hong Kong. The EU countries, especially Germany and the UK, were influenced by the weak US economy and likewise reduced the imports of plastic products from Hong Kong.

Interestingly, the "911" incident has produced a positive effect on plastic toy sales as Americans begun to put a higher value on families and are now willing to spend more on their children. This explains why the export of plastic toys has been relatively less affected than other products.

It is estimated that in 2002, Mainland demand for plastic products will remain stable. However, there will be increased competition from other exporting countries such as Thailand, and as a result of China's WTO membership.

Most forecasters expect tax cuts and low interest rates to result in positive economic growth for the US in 2002. Since the US leads the global economy, if the forecasts turn out to be true, then we could expect a stimulus to Hong Kong exports. However, according to clients and supported by industry economic data in relation to the US and Europe, there is unlikely to be a pick-up in plastic product exports in the first half of 2002. It is possible that a technical rebound would occur in the latter half of 2002 as buyers replenish their stocks, but it would be limited in scale.

Great patience is required of Hong Kong's plastic product exporters as we enter 2002. We would have to monitor 2002 end-of-year retail results once again to see if there is light at the end of the tunnel in terms of a rebound in 2003.