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Hong Kong Dock Strike Causing Concern

The three-week-old action has companies seeking alternative ports.

HONG KONG — Hong Kong manufacturers are growing more concerned about the ongoing dock workers’ strike and the impact it could have on small and medium enterprises.

The Federation of Hong Kong Industries, which represents Hong Kong manufacturers — most of which have factories in neighboring Guangdong province — said, “We hope the employers and employees would show mutual understanding toward each other and that both sides could quickly reach a mutually acceptable agreement through dialogue.”

In a meeting with senior officials from the CPC Provincial Committee and Guangdong Provincial Government last week, the federation said some shippers could have to divert cargo to other ports soon and that some may have to use ports that they never used before. That would mean that some outward-processing traders may have to add new ports to their contracts. Shippers expressed worries that the cargoes may be subject to a higher rate of inspection by Chinese Customs, the federation said. The use of new ports and new contracts may also result in some shipping delays.

Hong Kong is the world’s third-largest container port after Shanghai and Singapore. In the wake of the disruption, many shipping lines have diverted their vessels to Shenzhen, China.

Many of Hong Kong’s dock workers, including crane operators and stevedores, have been on strike for more than three weeks now. Workers, who are seeking a 17 to 20 percent pay raise, say they are now paid less than they were in 1997. They are also decrying working conditions, with no bathroom breaks and 24-hour shifts. Dock workers are currently paid 55 Hong Kong dollars a day, or $7 an hour, for a maximum of $167 dollars a day for 24 consecutive hours of work, according to Chan Chiu-wai, of the Hong Kong Confederation of Trade Unions.

Contractors have offered a 7 percent pay raise, which was rejected by the strikers. Meanwhile, striking dock workers have taken their protests to Cheung Kong Center, an office building owned by Hong Kong’s richest man, 84-year-old Li Ka-shing, whose Huchinson Whampoa Ltd. controls Hong Kong International Terminals.

Besides the ongoing strike, Hong Kong manufacturers are also concerned about rising costs in China, increasing competition for laborers and slowing orders. According to a March survey conducted by the federation, 35 percent of respondents said they were hit by a 15 percent drop in the gross value of orders compared with a year ago. Another 35 percent said orders were the same as last year, while 30 percent said orders increased by 8 percent year-on-year.

The survey, which polled 100 manufacturers, also found that rising business costs are a major challenge. Year-on-year costs have increased about 12 percent, with most stemming from rising labor costs. Nearly 80 percent of respondents said they are facing difficulties in recruitment.

Despite the challenges, manufacturers are upbeat about business prospects, with 70 percent of respondents saying they expect to continue with the current scale of production. More than 80 percent of those surveyed said they will stay in China and 10 percent said they would move part of their production elsewhere. Some 70 percent said they have been exploring the domestic Chinese market, but many reported difficulty finding sales outlets.