The “Made in Hong Kong” victim of Sino-American tensions

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Hong Kong | In Hong Kong, employees of the Koon Chun sauce factory are struggling to cover hundreds of thousands of bottles with a new “Made in China” label: this popular Hong Kong brand is a victim of Sino-American tensions.

Founded nearly a century ago, the family business has survived a world war, numerous economic crises and the slow demise of the Hong Kong manufacturing industry in favor of the much cheaper labor of mainland China.

This manufacturer of sauces remains one of the brands of the enduring financial center. In particular, it produces soy and oyster sauces that feature prominently in Chinese restaurants and kitchens around the world.

But as of November, in order to be sold in the United States, goods imported from Hong Kong will have to bear the “Made in China” label.

The measure was imposed by Washington in response to the draconian new national security law imposed by Beijing in the semi-autonomous territory.

This new regulation was announced in July by US customs, two days before the departure of a shipment of 1,300 boxes of Koon Chun sauces for Atlanta.

Overnight, employees were forced to affix new labels to all cargo as well as other cargo destined to leave for the United States this summer.

“It was mission impossible,” Daniel Chan told AFP from the factory founded in 1928 by his grandfather.

The passage of the National Security Law is seen as China’s response to months of pro-democracy protests that rocked Hong Kong in 2019.

Prepare for the most urgent

But both Beijing and the local authorities had said that this new legislation would have no impact on companies.

However, the revocation in July in retaliation for the preferential trade status granted to Hong Kong by Washington has serious consequences.

The economic repercussions were not long in coming in the former British colony, already in recession.

“Made in Hong Kong” products were the first to suffer from this.

Mr. Chan, who studied at Harvard in the United States, expected the political landscape to change in Hong Kong but didn’t think it would be that fast.

“I imagined something closer to 2047, the official date of the end of the ‘One country, two systems’ principle,” said Chan, referring to the retrocession agreement which guaranteed freedoms for Hong Kong people for 50 years. unknown in the rest of China.

In recent weeks, the 90 employees at the plant have been forced to adapt to the change.

After having been in a hurry by stamping the products with a “Made in China”, the company has new labels made on which the words “Made in Hong Kong” which appeared in large characters will be replaced by smaller “Made in China ”.

A lot of time has been spent reorganizing the storage of goods, with shipments being delayed.

“It’s very sad”

The companies were granted a reprieve, however, after Hong Kong’s Commerce Minister Edward Yau announced Washington’s decision to postpone the new label regulations until November.

“It saves us a little bit of time,” Chan said.

But, according to him, this is only “a short-term solution to this political fiasco”.

The Hong Kong minister threatened to sue the United States before the International Trade Organization.

He also claimed that Hong Kong product shipments to the United States were only Hong Kong $ 3.7 billion (US $ 400 million) in 2019, less than 0.1% of the city’s gross exports.

But Mr Chan doesn’t see it that way, with around half of his merchandise going to the United States, where the brand is particularly popular with the large Chinese diaspora.

“We’re the only company that is only based in Hong Kong and continues to do this kind of large-scale production and ship it to the United States,” he said.

When he thinks about the future, Chan worries that other international markets will follow suit like the United States.

“In 20 years, in 30 years, people will only have” Made in China “and forget Hong Kong”, he laments, before adding “it’s very sad”.

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