Hong Kong can 'survive and thrive' in global supply chains

25 November 2020

Hong Kong can survive and thrive despite the globalisation of supply chains but  it needs to use the power of data analytics, AI and automation to do so, according to report.

The Future of Sourcing: 2021 and beyond report by KPMG and InvestHK said the economic impact of Covid 19 had led companies to realise they had an urgent need to digitise supply chains.

The report looked at how Hong Kong could continue to serve as a regional supply chain hub for the rest of Asia as global supply chains are transformed by the economic effects of the pandemic.

“The globalisation of supply chains will actually see Hong Kong survive and thrive but we must be more agile as we serve those future digital supply chains with next generation data analytics, AI and automation,” said the report.

Hong Kong’s strengths included its high concentration of sourcing talent as well as financial, legal and commercial structures which make the city a preferred place to carry out business.

However the report did not address whether strained relations between the semi-autonomous enclave and Beijing might affect its reputation as a business-friendly destination.

The territory’s 30-year struggle to win concessions that would give it greater democracy has significantly intensified since last year.

After riots erupted in 2019, in mid November this year Beijing forced out several lawmakers claiming they endangered national security. This immediately prompted the resignation of opposition legislators.

The report said the “clustering effect” of nearby cities like Shenzhen and Guangzhou enhanced Hong Kong’s importance for supply chains.

The territory has an internationally-minded sourcing and design workforce to support diversification of manufacturing across ASEAN, while the government continues to support innovation.

The report interviewed several Hong Kong-based entrepreneurs about their opinions of the enclaves’s supply chain potential.

Walden Lam, co-founder of fashion manufacturer Unspun, said: “Hong Kong has a surprisingly deep network of 3D design technicians, supply chain intermediaries and 3D savvy manufacturers.

“Hong Kong’s manufacturing know-how represents a major advantage when it comes to automating production and changes that inevitably arise in light of changing economic circumstances and innovation.”

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