Overview
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Hong Kong's engineers are active in exporting their services to the region, particularly the Chinese mainland. In the construction sector, major types of professional engineering services that are currently being exported include project management, building services work and engineering consulting. Non-construction related engineering services are mainly exported indirectly through the export of manufactured goods, especially advanced equipment and products which embody high engineering services content.
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The Hong Kong Institution of Engineers (HKIE) had 11,032 corporate members as at July 2008. Professional disciplines with the HKIE include biomedical, building, building services, chemical, civil, control, automation & instrumentation, electrical, electronics, environmental, fire, gas, geotechnical, information, manufacturing & industrial, marine & naval, architecture, materials, mechanical and structural.
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The engineering qualifications of locally educated engineers have gained mutual recognition from Australia, Canada, Ireland, New Zealand, the UK, the US, the Chinese mainland and South Africa. Many experienced local engineers are also holders of international engineering qualifications.
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Hong Kong engineers are well recognized as flexible, hardworking, efficient and business oriented. In 2003, a rock sampling tool developed by Hong Kong's engineers was accepted by the European Space Agency (ESA) and carried in ESA's spacecraft on a mission to Mars.
Industry Data
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No. of Establishments
Dec 2007
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Employment
Dec 2007
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Architectural, surveying and project engineering services related to construction and real estate activities
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1,634
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19,237
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Engineering and technical services, not related to construction and real estate activities
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1,660
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16,754
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Sources: Quarterly Report of Employment and Vacancies Statistics for 2007 Fourth Quarter , Census and Statistics Department
Range of Services
Engineers involved in construction are multi-disciplinary, including civil, structural, building, electrical and mechanical. The residential building sector was the largest end-user group of construction activities in 2007, followed by commercial building and transport projects.
Engineers working in the non-construction related industries provide a broad range of disciplines and business activities, the larger ones being:
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Electronic engineering services
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Electronics circuit and other technical design services
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Electrical engineering services
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Mechanical engineering services
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Chemical engineering services
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Industrial research laboratory services
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Industrial technical consultant services
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Marine engineering services
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Computer hardware consultancy
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Other commercial research and development and testing services
Services Providers
Many engineers are members of the Hong Kong Institution of Engineers (HKIE), a local professional body for engineers. First established as the Engineering Society of Hong Kong in 1947, the HKIE was incorporated by government ordinance in 1975 to set professional standards and to encourage professional development for local engineers. In 1992, the HKIE qualification was recognized for government services appointments. The HKIE has become a key qualifying body for a wide range of engineering disciplines. It has over 10,000 qualified professional members.
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Corporate Membership of the HKIE
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Number of Members
July 2008
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All discipline
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11,032
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Civil
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5,273
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Structural
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3,623
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Building Services
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2,531
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Electrical
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1,810
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Mechanical
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1,533
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Electronics
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856
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Note: Other disciplines include geotechnical, marine, industrial, environmental, building, information, control, automation & instrumentation, and chemical. A member may belong to more than one discipline.
Source: Hong Kong Institution of Engineers
Exports
Construction-related
Most of the export business comes from Asia, particularly the Chinese mainland. The construction sector, particularly the professionals, benefits from Hong Kong's extensive investment activities in the region. Most of Hong Kong's investments in the region are in manufacturing, property development, hotel construction and infrastructure projects. Major types of professional engineering services that are currently being exported include consultative engineering services, engineering design services for construction projects and project management.
Non-construction related
Direct exports of Hong Kong's non-construction related engineering services are limited as the industry is domestically-oriented and entry into many foreign countries is restricted. However, such services are exported indirectly through the exports of manufactured goods, especially advanced equipment and products which embody high engineering services content.
A number of Hong Kong's engineering companies are exporting their services via working for multinational companies in Southeast Asia, Australia, and North America, covering a wide range of industries including information technology, telecommunications, chemicals and fast moving consumer goods.
The largest market for Hong Kong's engineering service exports is the Chinese mainland. High-tech equipment and engineering services are in great demand on the mainland. Japan, the US, Germany and other European countries have already made a strong presence on the Chinese mainland in areas such as electronics, electrical and mechanical, information systems, bio-chemical, industrial and telecommunications engineering. Engineering companies from other places in Asia, such as Taiwan and South Korea, are trying to capture a larger share of the Chinese mainland market. Singapore, striving to become the region's technology centre, is also active in developing opportunities in the mainland market. Even in the face of a highly competitive market, local engineers benefit from Hong Kong's extensive investment activities on the Chinese mainland.
Hong Kong's exports of architectural, engineering and other technical services amounted to HK$ 1,191 million in 2006, increasing from HK$ 1,035 million in 2005.
HK$ million
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2004
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2005
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2006
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Exports - Architectural, engineering and other technical services
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929
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1,035
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1,191
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Sources: Report on Hong Kong Trade in Services Statistics for 2006, Census and Statistics Department
Industry Development and Market Outlook
China's real estate development and construction market
China is keen on attracting foreign developers into the country's real estate development market. For a long time, Chinese markets in luxury office, apartment buildings, hotels and villas had enjoyed the most extensive foreign involvement. With the commencement of the housing reform in 1998, the demand for affordable housing started to increase. Since the housing reform and WTO accession in 2001, a series of regulations and administrative measures concerning foreign-invested enterprises have been implemented. The housing market is more open to foreign companies and the administration of foreign-invested enterprises becomes more standardized. The promising prospect of the mainland's estate development and construction market, especially in the western region, has generated lots of business opportunities to foreign developers.
Hong Kong, thanks to its proximity to the mainland, is one of the major beneficiaries of this new trend. Hong Kong's companies are the leading investors in the mainland's infrastructure and housing project, due to their knowledge about the mainland market, and their expertise in quality control, cost control, project management and financial support. Hong Kong's electrical and mechanical engineering services providers can also participate in the mainland's medium-cost housing programmes. In the recent past, Hong Kong's engineering service sector has been working closely with their counterparts on the mainland to lay the foundation for cooperation. For example, the HKIE has signed a cooperation agreement with the China Civil Engineering Society.
With the signing of CEPA, the liberalization measures have as well enhanced Hong Kong's unparalleled position amongst foreign-invested enterprises. Under this arrangement, Hong Kong companies are permitted to engage, in the form of wholly-owned operations, in activities relating to self-owned or leased properties for high standard real estate projects, which are not stipulated in China's WTO Commitments. On top of China's WTO commitments, Hong Kong's services suppliers are able to provide, in the form of wholly-owned operations, real estate services on a fee or contract basis on the Mainland. Construction enterprises in Hong Kong, in addition, are exempted from the foreign investment restriction when undertaking Chinese-foreign joint construction project on the Chinese mainland. Hong Kong's construction companies, such as Hip Hing and Paul Y, have benefited from these new arrangements.
Infrastructure projects in the region
Many Asian countries (e.g. India and Indonesia) have urgent needs to continue upgrading their basic infrastructure, road network, port facilities, housing and city planning. Private participation is on the rise. Foreign firms are increasingly allowed to participate as investors in the ownership as well as the management of these projects. According to the Asian Development Bank, Asia would require US$300 billion/year in infrastructure investment over the next few years to support economic growth.
Besides, there is huge demand for expertise in infrastructure development on the Chinese mainland, such as subway systems in more than 10 cities that are planned to be built or expanded. There are also several areas of development on the mainland which create business opportunities to engineers, including public utilities, energy management and environmental-related work.
Rising demand for non-construction related engineers
The shifting of manufacturing bases by companies in developed countries into Asia has helped transform the region into the world's major exporter of electronic products, generating strong derived demand for engineering services, particularly in areas of mechanical and electrical, electronics and information technology. More and more overseas manufacturers, from places including South Korea, the US and Japan, would like to form partnership with Hong Kong's engineers to provide electronic product engineering design services to benefit from Hong Kong's proximity to low cost manufacturing bases in the Asian market.
The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)
CEPA provides many benefits to Hong Kong's engineering businesses, which range from greater flexibility in entering the mainland market to mutual qualification recognition. Under CEPA, construction professional services include construction design services, engineering services, integrated engineering services, urban planning and landscape design services (except overall urban planning services). For construction and engineering design enterprises set up on the mainland by Hong Kong service suppliers, the performance of the enterprises both in Hong Kong and on the mainland is taken into account in assessing the qualification of the enterprises on the mainland. The Regulations on Administration of Foreign-Invested Construction and Engineering Design Enterprises stipulate that to fulfill the related residence requirements, foreign professional and technical staff need to reside on the Chinese mainland for a cumulative period of at least six months in a year. With CEPA provisions, the required residence period for Hong Kong professional and technical staff can be counted as their period of residence on the mainland under the new arrangement.
In August 2004, a mutual recognition agreement for structural engineers entitled "Reciprocal Recognition Agreement between the National Administration Board of Engineering Registration (Structural) and the Hong Kong Institution of Engineers" was reached. In accordance with Agreement, members in the structural discipline with 5 years standing will be required to attend and pass (a) a training session with one-hour multiple choice test; and (b) a short interview of 20 minutes in order to register as Class I Registered Structural Engineers on the mainland. According to HKIE, the fourth session of examinations will be held in September 2008.
CEPA also allows eligible Hong Kong residents to take part in the following 18 Mainland professional examinations related to the construction and engineering services.
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Professional examinations related to construction and engineering services
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Registered architect
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Registered structural engineer
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Registered civil engineer (geotechnical)
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Construction supervising engineer
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Cost engineer
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Registered town planner
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Certified safety engineer
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Registered nuclear safety engineer
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Constructor
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Registered public facility engineer
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Registered chemical engineer
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Registered civil engineer (harbour and waterway)
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Registered facility supervising engineer
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Environmental impact assessment engineer
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Real estate appraiser
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Registered electrical engineer.
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Certified public valuer
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Registered consulting engineer (investment)
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Source: Supplement to CEPA (CEPA II)
To facilitate Hong Kong residents to apply for professional qualification examinations held in Guangdong, Hong Kong residents are also permitted to apply for the examinations via the Guangdong professional qualification examination centre.
CEPA measures announced in late June of 2006 stipulated that Hong Kong companies can set up wholly-owned construction engineering cost consulting service companies on the mainland. Hong Kong companies' individual performance, be it in Hong Kong or on the mainland, will be taken into account in qualification assessment by mainland authorities (as in the case of engineering design enterprises and urban planning service enterprises).
The latest phase of CEPA, signed in June 2007, helped reinforce the co-operation by initiating exchanges on the mutual recognition of qualifications in area of registered electrical exploration & design engineers and registered public facility exploration & design engineers. The competent authorities or professional bodies of both sides will start technical exchanges on registered geotechnical exploration & design engineers and land surveying. A working group is also established to study and take forward matters in connection with registration and practice for construction sector professionals after they have acquired professional qualifications through mutual recognition.
As at end-May 2008, there were 65 approved Hong Kong services suppliers (HKSS) in the sector of construction professional services and construction and related engineering services, out of a total of 68 applications.
