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Hong Kong’s Growing Green Potential in the PRD
Research Notes Guangdong Stepping up Environmental Protection Measures

31 October 2008 - About 40 per cent of Hong Kong manufacturers operating in the Pearl River Delta (PRD) have increased their investment in technology to comply with the Guangdong government's increasingly stringent environmental requirements, a recent research reveals.

With the Guangdong government's determination to tackle pollution in the PRD, the demand for environmental technology, products and services is increasing rapidly, bringing business opportunities to Hong Kong's eco-industry, according to a recent survey done by the Hong Kong Trade Development Council.

Rapid economic development in the PRD has severely damaged the environment. Air pollution affects most PRD cities, and water in many areas of the Pearl River has become so polluted that the river is unsuitable for irrigation, aquaculture and recreation.

In response, the Guangdong government has set ambitious environmental targets. By 2020, the government plans to reduce sulphur dioxide emissions by 21 per cent and chemical oxygen discharge by 24 per cent. And in just two years, it plans to increase its overall investment in environmental protection by three per cent of GDP in six key sectors: ecological protection and construction, wastewater treatment, desulphurisation of electricity plants, solid waste disposal and treatment, radioactive waste disposal, and environmental emergency systems.

The Guangdong government has already earmarked RMB133.9 billion for related environmental projects and is planning to commit another RMB40 billion to build pollution- control facilities in its industrial parks.

The government is also enforcing stringent environmental regulatory requirements. This means that manufacturers in the region will have to decrease the environmental impact of their factories. Overseas buyers are also demanding more eco-friendly suppliers.

All this adds up to significant opportunities for Hong Kong's eco industry and its global partners.

While most foreign environmental protection companies are strong in research and development, they are increasingly turning to Hong Kong for help in pursuing environmental

opportunities in the Chinese mainland. Hong Kong SMEs bring local knowledge, industry
contacts and regional experience in technology application to the partnerships. They also bring Hong Kong's advantages in financial services and its strong intellectual protection measures.

There are about 57,500 Hong Kong-owned factories in the PRD, with the majority engaged in six industry sectors: electronics, IT and communication; textiles, garments and footwear; plastic injection moulding; metal plating and processing; printing and packaging; and chemicals. The six sectors accounted for more than 60 per cent of the total industrial output of the PRD in 2006.

The Chinese mainland and Hong Kong's Closer Economic Partnership Arrangement (CEPA) provide further encouragement for foreign environmental industry players to partner with Hong Kong companies in tapping the PRD market. According to the latest round of liberalisation measures under CEPA, starting January this year, Hong Kong service providers can set up wholly-owned enterprises on the mainland to provide green services such as sewage services, refuse disposal services and cleaning services of exhaust gases. And starting from January 2009, Hong Kong service suppliers can bid for pollution control projects in Guangdong more easily, as Guangdong Province can approve the qualification of Hong Kong service suppliers.

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Sam Ho Tel: (852) 2584 4569 Email: sam.sy.ho@tdc.org.hk

About the HKTDC
Established in 1966, the Hong Kong Trade Development Council (HKTDC) is the international marketing arm for Hong Kong-based traders, manufacturers and service providers. With more than 40 offices worldwide, including 11 in the Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business with China and Asia. The HKTDC also organises trade fairs and business missions to connect companies with opportunities in Hong Kong and the mainland, while providing information via trade publications, research reports and online. For more information, visit www.hktdc.com


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