Hong Kong Industry Profiles

• Hong Kong's testing and certification industry has grown substantially since the 1980s. In 2009, the industry is comprised of some 690 establishments, most of which are private laboratories, employing a total of some 15,000 people.
• The industry provides testing and inspection 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 industry has been identified as one of the six new economic pillars which Hong Kong has enormous potential for development. The Hong Kong Council for Testing and Certification has been established to enhance the professional standards and recognition of Hong Kong’s testing and certification services in the international arena.
• 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

Note: According to Census and Statistics Department, the value-added and employment of the testing and certification industry in private sector were HK$5.1 billion and 12,600 in 2009

Source: Report on the 2009 Survey of Testing and Certification Activities, Census and Statistics Department

Range of Services

The industry provides a high volume of testing and inspection 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 of January 2011, there were 172 accredited laboratories/proficiency testing providers, 17 accredited certification bodies and 20 accredited inspection 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

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.

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 has then established the Hong Kong Council for Testing and Certification (HKCTC) to drive the development of the industry, to raise its professional standards and to enhance the recognition of the industry in the international arena by building up a brand name for Hong Kong's testing and certification services.

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. In 2009-10, GL has already outsourced some 79,000 food tests to accredited private laboratories and it plans to increase the number of food tests to 107,000 in 2010-11, which accounted for about 70% of GL's regular food surveillance testing work. The outsourcing of testing work to the private sector will provide more business opportunities for the private laboratories.

Supplement VII to CEPA signed in May 2010 allows for the first time testing organisations in Hong Kong to co-operate with designated Mainland organisations in testing products for the China Compulsory Certification (CCC) System on a pilot basis, for selected products processed in Hong Kong (i.e. toys, circuit installations, information technology equipment and lighting apparatus). These testing organisations have to be accredited by the Hong Kong Accreditation Service (HKAS) as capable of performing tests for the relevant products.

Market Opportunities

In addition to traditional sectors like textiles, clothing and footwear, toys and games, electrical products as well as medicines, HKCTC has identified good market opportunities for Chinese medicines, construction materials, food and jewellery. First, given its proximity to the mainland and long history as a major trading hub in the region, Hong Kong has a clear advantage in the trading of Chinese medicine. If more can be done on the front of testing and certification services for Chinese medicine, it will certainly help build up greater confidence in the use of Chinese medicine in the overseas markets. In fact, Hong Kong has built up local capacity and capability in the testing of Chinese medicine through the introduction of testing requirement for registration of proprietary Chinese medicine testing and the development of Hong Kong Chinese Materia Medica Standards. Some of the local universities also possess considerable expertise in the field of Chinese medicine and can provide technical support in the development of new testing services.

Second, with a view to upgrading the quality of its buildings and setting an example for the local construction industry, the Hong Kong Housing Authority is taking the lead in requiring product certification for certain construction materials used in its projects. Product certification for other construction materials such as cementitious materials, concrete admixture, paint (with volatile organic compound contents), mesh reinforcement and water and drainage pipes inside buildings, may be required at a later stage. With the various major infrastructure projects coming on stream, promotion of wider adoption of product certification for construction materials in public works may also bring new business opportunities for the testing and certification industry. As the private sector also has an incentive to enhance quality of their buildings, there should also be extra business opportunities if the new product certification requirements are to be promoted to the private sector as well. As far as export market is concerned, Hong Kong’s testing and certification industry can perform a stronger supporting role for the large volume of construction materials produced and exported by the Chinese mainland.

Third, there is growing public awareness and concern over the safety (e.g. on heavy metals, preservatives and melamine) and the nutritional content (e.g. protein, fat and sodium) of food. There will also be potential demand for testing and certification services arising from government initiatives, such as the progressive introduction of legal standard or regulatory framework for harmful substances (e.g. preservatives, colouring matters, pesticide residues, veterinary drug residues and other food additives). Food trade might require some two million tests each year. 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.

Last, Hong Kong’s jewellery trade is renowned in the world market. Demand for jewellery by tourists visiting Hong Kong is also significant. Consumers will welcome greater quality assurance given the high value of jewellery. There should be potential synergy for the jewellery trade to make use of the high credibility of Hong Kong’s testing and certification industry to enhance consumer’s confidence and hence the competitiveness of Hong Kong’s jewellery trade in both the mainland and overseas markets. Some sectors in the jewellery trade have been exploring the potential of new testing and certification services to support the growth of trade. The areas being explored include product certification scheme with identification for individual pieces of jewellery and development of local trade standards for testing of other precious gemstones (e.g. ruby, pearl etc).

These four sectors aside, HKCTC has further commented that environmental protection and information and communication technology (ICT) are two emerging sectors that have potential for development. On one hand, as the general public is putting increasing emphasis on environmental protection, there may be more tests related to the "green" elements of consumer products manufactured on the mainland. On the other hand, given the wider adaptation of ICT nowadays, there may be opportunities for further development of testing and certification services in this trade, such as third-party software testing and a software product certification scheme.