Hong Kong's textile industry is attempting to upgrade from a traditional trade transit hub to an engine with greater strategic initiative. A research report titled 'Building a New Advantage for Hong Kong's Textile and Garment Industry', written by the Li & Fung Supply Chain Research Institute of the Hong Kong University of Science and Technology and guided by the China National Textile and Apparel Council (CNTAC), was officially released on July 14. The core of the report is not about listing difficulties, but rather proposing six specific action paths, aiming to secure a more proactive role for Hong Kong in the upcoming national '15th Five-Year Plan' cycle.
From 'Follower' to 'Leader': A Strategic Anchor
A key judgment in the report is that China's textile industry has moved from a 'follower' phase to a 'comprehensive leader' phase. This implies that the advantages Hong Kong previously relied on—re-export trade and management of OEM—are being replaced by new competitive logics. Legislative Council member Sun Chan pointed out at the press conference that the textile industry is not a sunset industry but a 'sunrise industry' with great potential, provided it can reconstruct its value proposition. The six major strategies proposed by the industry revolve around this judgment—no longer satisfied with being an intermediary, but aiming to become a rule-setter and value hub for the supply chain.
Core of the Six Strategies: Finance, Talent, and Digitalization
Among the six recommendations, three paths are particularly noteworthy. First, revitalizing the trade finance ecosystem. The report suggests that when the SAR government enhances the competitiveness of Hong Kong as a corporate treasury hub, it should expand the definition to include 'sourcing centers' and 'sourcing activities', creating a 'CTC+ model'. The direct intention is to attract multinational sourcing centers to relocate or return to Hong Kong, thereby generating significant trade finance demand and activating the capital flow for local SMEs. For Hong Kong's small and medium enterprises, which have long faced tight credit, this is akin to opening a 'main artery'.
Second, building an international textile and fashion hub. Kenneth Lo, President of the Hong Kong Textile Council, proposed adopting an open attitude of 'whoever comes is a Hong Kong enterprise, whoever lands is a Hong Kong talent' to attract global fashion talent, and to plan Sham Shui Po as a regional fashion landmark. The underlying logic is to transform Hong Kong from a 'manufacturing base' into a 'cultural export window', enhancing soft power through cross-border integration of fashion with film and music using internationally accepted narratives. The first-ever 'Hong Kong Fashion Fest' combined with 'CENTRESTAGE' is seen as a pilot for this strategy.
Third, deepening 'AI+' applications, especially for the digital transformation of SMEs. Ting Chung Wong, Supervisor of the Hong Kong Textile Council, noted that the textile and garment industry is already a significant part of new productive forces. The industry suggests establishing an 'Industry AI Application Acceleration Program' to subsidize companies for fine-tuning large models, and creating a 'fast track for AI+Textile' to simplify the approval process for funding. Chan Wing On, Chairman of the Clothing Industry Training Authority, further proposed increasing subsidies for AI skills training for SMEs and building an 'AI Tool Library' with expert oversight to prevent intellectual property leakage. The core of these measures is to lower the barrier for SMEs to adopt cutting-edge technologies, preventing digital transformation from becoming a 'monopoly' of large enterprises.
Conduction Effects on Industrial Clusters and Impact on Buyers
These initiatives in Hong Kong will have a direct conduction effect on textile industrial clusters in the Pearl River Delta, especially in Shenzhen, Dongguan, and Guangzhou, which have long maintained close trade and design collaboration with Hong Kong. If Hong Kong successfully attracts multinational sourcing centers to return, it means that financial settlement, compliance review, and brand planning for orders will be more concentrated in Hong Kong, while manufacturing and supply chain execution will still rely on mainland industrial clusters. For buyers, this could lead to two changes: first, a broadening of trade finance channels, with more flexible letters of credit and accounts receivable financing through Hong Kong platforms; second, higher requirements for suppliers' digital capabilities, as the Hong Kong hub will increasingly favor factories with AI scheduling and IoT traceability capabilities.
Risks and Implementation Challenges
However, this ambitious plan faces practical obstacles. Firstly, Hong Kong's local manufacturing base has shrunk significantly. To revitalize the industry chain ecosystem, deeper synergy with mainland industrial clusters is needed, not replacement. Secondly, AI applications in the textile industry are still in their early stages, with SMEs generally lacking data accumulation and technical talent. Whether the 'fast track for AI+Textile' can truly lower the threshold depends on the speed of government funding and approval efficiency. Additionally, building an international fashion hub requires long-term cultural investment and brand cultivation, which cannot be achieved through short-term policies. Whether Hong Kong can maintain a differentiated competitive advantage against mainland fashion cities like Shenzhen and Shanghai remains uncertain.