Editor’s Note
This article highlights the crucial role industry associations played in supporting Hong Kong’s hardest-hit sectors during the 2003 SARS crisis, showcasing their importance as pillars of resilience in times of profound economic and social disruption.
The SARS outbreak last year plunged Hong Kong into its most difficult period. However, during this critical time when industries in the hardest-hit areas were most in need of help, industry associations played a vital role.
In early April 2003, Swiss authorities banned Hong Kong exhibitors from the Zurich/Basel Watch and Jewellery Fair citing the epidemic.
said Chow Ping-kuen, General Manager of the Hong Kong Jewelry Manufacturers’ Association, still upset about the unfair treatment in Switzerland last year.
Trade fairs are the most important sales and promotion channels for jewelers. After being shut out in Switzerland, the Jewelry Manufacturers’ Association, on one hand, joined other groups in protesting and appealing against Switzerland’s decision, and on the other hand, immediately began formulating contingency plans for similar situations. Sure enough, in May, the US “JCK Las Vegas Jewelry Show” proposed refusing the “Hong Kong Pavilion” due to SARS.
The “JCK Jewelry Show” is one of the world’s largest jewelry fairs, highly valued by the industry. For this reason, Chow Ping-kuen personally flew to Las Vegas and proactively presented his association’s plan to the event organizer.
he said. The plan was also communicated to local media and chambers of commerce, with a clear guarantee that everyone would strictly comply. Ultimately, over 110 Hong Kong exhibitors participated as scheduled, with not a single SARS infection case reported.
By implementing this comprehensive emergency plan, the Hong Kong Jewelry Manufacturers’ Association successfully organized groups to participate in all major international fairs last year except Basel, providing timely relief for the industry.
There are many such examples in Hong Kong. During the SARS outbreak last year, the Hong Kong Retail Management Association actively used various channels to directly communicate the industry’s difficulties to relevant parties and worked to minimize losses. They held press conferences calling for landlords to halve rents for retail tenants; they communicated with major property developers to make them aware of the industry’s plight; they directly negotiated with the government for rates and tax relief; they also actively participated in promoting the establishment of the “Economic Strategy Group” and became its only industry association member.
It is said there are thousands of industry associations in Hong Kong, large and small, generally divided into two types: one is large chambers formed by the federation of multiple chambers, like the General Chamber of Commerce and the Federation of Hong Kong Industries; the other is industry-specific associations directly serving their sectors, like the Hong Kong Jewelry Manufacturers’ Association and the Hong Kong Retail Management Association.
Unlike many “administratively-led” associations in mainland China, Hong Kong’s industry associations are almost entirely initiated and established by the private sector, with no government funding. In Hong Kong, establishing an industry association is as simple as setting up a company, with similar procedures and no restrictions. Typically, associations register as “public companies limited by guarantee without share capital.” If the company is liquidated, each member is liable to contribute a limited amount to cover debts and other costs.
As a typical Hong Kong association, the Hong Kong Jewelry Manufacturers’ Association currently has 334 corporate members and 30 full-time staff, making it the association with the most manufacturer members in Hong Kong’s jewelry sector. The supreme authority of the Association is the General Meeting of Members, held once a year. Below it is the Council General Meeting, with 33 council members, 23 of whom form the Standing Council, which oversees a 19-member Executive Committee. The Executive Committee is the daily decision-making body, meeting once a month. The implementation of decisions is carried out by the General Manager and the 30 staff members.
To meet the diverse needs of the industry, the Jewelry Manufacturers’ Association has comprehensive functions covering exhibitions, publications, information, membership, education and training, mainland affairs, and technology development. Chow Ping-kuen said,
Beyond handling emergencies like the SARS crisis, the association focuses more on daily services for members. For example, the Hong Kong Jewelry Manufacturers’ Association organizes Hong Kong delegations to international jewelry trade fairs and hosts the “Hong Kong International Jewelry Manufacturers Exhibition” annually; publishes various jewelry industry publications; investigates the credit background of domestic and overseas jewelers, providing credit inquiry services for members; offers financial support services; communicates with the government and represents the industry in various activities; organizes lectures and training to help members improve their professional standards.
It is reported that each member joining the Jewelry Manufacturers’ Association must pay a one-time “entrance fee” of HK$29,000, followed by an annual fee of HK$6,800—a relatively high standard in Hong Kong. However, the annual fee income of over HK$2 million is just a fraction of the association’s total annual revenue of HK$60 million. The vast majority of the association’s income comes from organizing and participating in exhibitions, amounting to about HK$45 million, with additional revenue from advertising and publications.
Despite the seemingly high annual revenue, the association is a non-profit organization. Since its income primarily comes from the products and services it provides, it is mainly used to cover the costs of those services, operating on a “break-even” basis. For instance, last year, the Jewelry Manufacturers’ Association had a surplus of only HK$700,000.
Regarding the use and management of funds, the association has strict financial systems. For example, only four people—the Association Chairman, two Vice Chairmen, and the Treasurer—can sign checks, but they do not have the authority to initiate check issuance; that responsibility lies with the General Manager. For reimbursement, documents require signatures from the responsible colleague, department manager, General Manager, Chairman, and finance personnel. Furthermore, they have an agreement with the bank: if a check exceeds HK$50,000, payment will only be made after telephone verification with the General Manager.
said Chow Ping-kuen.
The Hong Kong Retail Management Association is also a chamber with significant influence in its industry. The association currently has over 500 member companies, operating more than 5,000 retail stores, employing about two-thirds of Hong Kong’s total retail workforce. The Chairman of the Retail Management Association, Yu Peng-chun, believes that the association represents the common interests of the industry and must voice a unified opinion on matters related to retailers’ vital interests.
Retail is an industry that directly faces consumers; therefore, industry standardization and respect for consumers are also common industry interests. To this end, the Retail Management Association formulated a “Code of Practice,” which all member associations must adhere to. The code covers various aspects such as merchandise sales, product safety, and related services, providing clear regulations and guidelines on pricing, returns and exchanges, product safety, liability, and customer service attitude concerning consumers.
Some industry insiders believe this code is crucial because stores rely on consumer business; protecting consumer interests means protecting retailers’ interests—the two are aligned. Moreover, only by establishing this concept across the entire industry can the overall development of the industry be promoted.
Regarding relations with the government, Yu Peng-chun said that to represent the common interests of the industry, the association must serve as a bridge and platform for communication between the industry and the government. Nowadays, if the government intends to introduce new regulations or laws for the retail industry, it consults the association beforehand. The association, in turn, promptly collects industry opinions and provides feedback to the government, achieving a good balance between public interest and the retail sector.
Yu Peng-chun pointed out that although businesses within the industry compete with each other, they also share common ground in competition, such as rents, human resources, and the market—factors related to the survival and development of shops, forming a common platform among members.
