Hong Kong garment manufacturers are looking to Myanmar as a sourcing destination. About a dozen Hong Kong garment companies are to build plants in a special economic zone in Myanmar comprising 100 hectares. Most are undergarment manufacturers with some others producing jackets. One will process recycled fabrics to supply underwear and swimsuit manufacturers. One wants to establish a complete production chain in Myanmar, from textiles to dyeing. Therefore, it is looking for a big space to house its suppliers.

In contrast China’s garment manufacturing industry continues to lose its competitive edge as a low-cost clothing supplier through wage rises and increasing regulation. The Hong Kong government has signed an investment promotion and protection agreement with Myanmar. In fact, manufacturing in Myanmar is seen as being more attractive than in Cambodia or Bangladesh. Cambodia has influential labor unions, who are firm on minimum wages. In Bangladesh, big companies are thinking of stopping orders over concerns with its human rights and corporate social responsibility issues. But Myanmar has a huge workforce for whom wages are not an issue. The country is seen as politically stable. 

Hong Kong companies relocating to Myanmar hope to benefit from the low and zero duties charged on its exports to the European Union.