Pearl River Delta loses charm with HK businesses

Of the surveyed companies, 32 percent said they plan to move their manufacturing business to remote inland areas and Southeast Asia, which have relatively lower labor costs, according to the survey.

"As the Delta region is pushing forward industrial upgrading, more professional workers are needed in the traditional manufacturing industry," Tsui said.

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Tsui said that the labor authorities in Guangdong province should work with professional organizations to offer training services for workers.

"Moreover, companies should also shift their focus from OEM to ODM (original design manufacturer) and OBM (original brand manufacturer) to boost competitiveness amid the downsized global demand," he said.

According to the survey, the United States and Europe still remain top two markets for Hong Kong-based companies.

Feng Shengping, chief researcher of the Guangdong Provincial Situation Research Center, said Hong Kong manufacturers should focus more on the mainland market to avoid the impact from rising labor costs and the labor shortage.

"There is still huge business potentials for HK-based companies in the domestic consumption market as the Chinese economy is booming," Feng said.

HK-based Lomak Opto-Mechatronics Technology Company, for example, have benefited from the mainland market over the past few years.

The company, based in Dongguan, a traditional manufacturing city in the heart of the Delta region, has opened businesses on several e-commerce platforms to tap the domestic market, with products being widely sold in Guangdong and other inland provinces and regions, company sources said.

According to the company, domestic sales accounted for more than 40 percent of its business last year, helping it better avoid profit loss amid rising labor costs and labor shortage.

Emma Dai contributed to this story.

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