• Hong Kong's testing and certification industry has grown substantially since the 1980s. The industry is comprised of over 300 establishments, most of which are private laboratories, employing more than 10,000 people.
• The industry provides testing services for consumer products manufactured in the Pearl River Delta for overseas buyers, and certification services for such products as well as for the relevant quality management systems. There is also an increasing demand for food testing conducted by private laboratories.
• The Task Force on Economic Challenges has identified the testing and certification industry as one of the six new economic pillars which Hong Kong has enormous potential for development.
• Given a robust accreditation system and a good international reputation, Hong Kong is well positioned to act as an independent third party to provide quality certification and product testing services for mainland enterprises to boost the confidence of overseas and local buyers.

Industry Data

According to HKSAR Commerce and Economic Development Bureau, Hong Kong's testing and certification industry is comprised of over 300 establishments, most of which are private laboratories, employing more than 10,000 people. The size of these laboratories, in terms of the number of employee, ranges from a few to 2,000. During 2003 and 2008, the industry expanded at an annualized rate of 5%, in terms of the number of employees.

Range of Services

The industry provides a high volume of testing services for consumer products manufactured in the Pearl River Delta, such as toys and children’s products, electrical and electronic goods, and textiles and garments upon the requests of overseas buyers. In addition, the industry provides certification services for such products as well as for the relevant quality management systems (e.g. ISO9000). Some laboratories also conduct testing on food, Chinese medicine and construction materials for importers and suppliers. In fact, food importers and suppliers have increasingly engaged private laboratories to conduct food testing before putting the food on the market shelves. Other testing services include chemical testing, environmental testing, medical testing, proficiency testing, and physical and mechanical testing.

Services Providers

Many laboratories and certification bodies in Hong Kong are accredited. The Hong Kong Accreditation Service (HKAS) under the Innovation and Technology Commission (ITC) provides accreditation service for laboratories, certification bodies and inspection bodies through the Hong Kong Laboratory Accreditation Scheme (HOKLAS), Hong Kong
 
Certification Body Accreditation Scheme (HKCAS) and Hong Kong Inspection Body Accreditation Scheme (HKIAS). As at August 2009, there were 162 accredited laboratories and 14 accredited certification bodies in Hong Kong.

Private laboratories now seek accreditation on a voluntary basis, but they are strongly encouraged to do so, as testing, certification and inspection services accredited by the local accreditation bodies are widely recognized in overseas markets.

Industry Development and Market Outlook

Support and Facilitation from the Government

The Task Force on Economic Challenges has identified the testing and certification industry as one of the six new economic pillars which Hong Kong has enormous potential for development, considering that this industry could benefit the economy in the medium and long term. The government shall establish the Hong Kong Council for Testing and Certification to enhance the professional standards and recognition of Hong Kong’s testing and certification services in the international arena, while exploring more business opportunities for the industry.

HKAS/ITC will continue to provide assistance and support to private laboratories which are interested in obtaining accreditation. An additional amount of $1.6 million per year will be provided to HKAS/ITC to strengthen its staffing support and for promoting and enhancing its accreditation service. The Government Laboratory (GL) would assist by promoting the upgrade of private laboratories by sharing testing methods with them as well as conducting technical seminars, proficiency tests and inter-laboratory comparison studies on a more regular basis. Furthermore, GL plans to outsource more of its regular food surveillance testing work to the private sector. As a pilot scheme, GL has already started to outsource some 22,000 food tests to accredited private laboratories in 2008-09. GL plans to increase the number to at least 77,000 in 2009-10 (about 50% of its regular food testing work). The outsourcing of testing work to the private sector will provide more business opportunities for the private laboratories.

Market Opportunities

With the progressive setting of legal standards for harmful substances in food in Hong Kong (e.g. preservatives, colouring matters, pesticide residues, veterinary drug residues, and other food additives) and the commencement of the law to empower the authorities to prohibit the import and supply of food and order a food recall, as well as commencement of the nutrition labelling requirements on 1 July 2010, the demand for testing services by the food trade would increase substantially. Food trade might require some two million tests each year when all the new food safety legislation has come into effect. In addition to conducting food testing for our local food importers and suppliers, laboratories also have the potential to provide food testing services for food traders in the mainland, where much emphasis is now placed on food safety.

Market opportunities also arise from more stringent product safety standards overseas, increased customer awareness on consumer safety as well as opportunities for environmental concerns. For example, the US Consumer Product Safety Improvement Act requires every manufacturer of a product subject to any Consumer Product Safety Commission (CPSC) standard must issue a certification stating the CPSC regulations that apply to the product and that the product (based on appropriate tests) complies with all such regulations. In the EU, there are a number of directives for environmental protection, including the Directive on Waste Electrical and Electronic Equipment (WEEE) and the Directive on Restriction of Hazardous Substances (RoHS), which would induce demand for industrial product testing and certification services.

Hong Kong as a Testing and Certification Centre

Hong Kong, as an international trade centre situated strategically at the door of the huge and rapidly growing mainland market, has potential to develop into a major product testing and certification centre in the region. By acting as an independent third party in providing services to mainland enterprises, it would help safeguard consumer interests, build up the Hong Kong brand, enhance the competitiveness of local and mainland products in the world market, and create high-end employment opportunities for professionals and skilled-workers.

Establishing Hong Kong as a testing and certification centre is in line with the objective of upgrading the Pearl River Delta into “a world-class base for advanced manufacturing industries”, as set out in the National Development and Reform Commission’s Outline of the Plan for the Reform and Development of the Pearl River Delta (2008-2020). However, the local industry will have to compete with international brands, such as ITS, SGS and TUV, which have already set up operations in many parts of the mainland to provide service at a cost lower than the Hong Kong service providers.