Hong Kong entrepreneurs who have spent years trying to rebuild the “Made in Hong Kong” brand said the recent decision by Washington to relabel all products with a Made in China tag will undo all their efforts — and destroy a burgeoning multimillion-dollar industry.

The U.S. earlier imposed the new measure in response to Beijing’s implementation of its national security law in Hong Kong, which it said effectively made the financial hub just another mainland city. Washington had treated Hong Kong as a separate entity from mainland China because of the “one country, two systems” framework, imposing a different tariff regime and enabling Hong Kong manufacturers to differentiate their products.

Surgical masks, personal protective equipment and other medical products with a “Made in Hong Kong” tag had won the confidence of U.S. consumers, said Jason Poon, a director of surgical mask manufacturer Lockill. That would now be lost and demand for such products would shrink considerably, he said.

“Hong Kong products had an advantage,” Poon said, citing the price of surgical masks: those made in the mainland sold for about a quarter to a fifth of the price. “This shows that Hong Kong brands can do it,” he said.

Lockill’s U.S. sales have risen to around HK$1 million (US$129,000), accounting for 10% of its business. With the new U.S. policy set to come into effect in November, the company believes it has no choice but to give up that market, Poon said.

Secretary for Commerce and Economic Development Edward Yau earlier argued that because the U.S. made up only 0.1% of Hong Kong’s total exports the new policy would have little impact on the city’s companies.

Poon disagreed. Figures cited by Yau were from 2019, and so did not reflect the huge increase in the exports of medical products by Hong Kong seen after the COVID-19 outbreak earlier this year, he said.

EONIQ has grown into a business with US$2 million a year in sales since the local watchmaker was set up six years ago. Founder Quinn Lai opened a shop in a Tsuen Wan industrial site, hiring technicians to hand-assemble parts in a bid to revive Hong Kong’s once-thriving watch industry.

Hong Kong once held a place in the global timepiece market, hosting excellent watch designers, some of whom had worked with top Swiss brands, Lai said.

“If I am told my brand has to carry the ‘Made in China’ tag, I can’t reconcile myself to that,” he said. “It’s not a question of whether you like or dislike that place. It’s that I really want Hong Kong to have its own brands. And I know well that Hong Kong has very good standards of craftsmanship.”

A “Made in China” label on locally tailored cheongsam, a type of traditional Chinese dress, would dishearten the Hongkongers who had put great effort into building the city’s own brands, said Ding Yung, founder of dressmaker Yan Shang Kee.

Hong Kong products carried an assurance of quality, even though their production process might not always be entirely situated in the city, said Yung. Her company orders its linen from Japan and Italy, while she is responsible for the design before a Shanghai tailor makes the dress. The process demonstrated Hong Kong’s value in coordinating production, Yung said.

“Behind ‘Made in Hong Kong,’ there are a group of enthusiastic Hongkongers who work hard in making good products. If it turns out that all products will be labeled ‘Made in China,’ that is to efface all of our efforts,” she said.

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