HK's testing and certification industry set to increase role on mainland

Hong Kong's testing and certification industry is set to play a bigger role on the Chinese mainland market.

From March, accredited testing organizations in Hong Kong have been allowed to undertake testing services of audio and visual products manufactured in Guangdong province for the China Compulsory Certification System, under the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalization of Trade in Services in Guangdong, also known as the Guangdong Agreement.

The agreement was signed in December 2014 under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement, which first promoted cooperation between the mainland and Hong Kong in the T&C field in 2010, and the cooperation ties have since been deepened.

To better inform the T&C industry of the opportunities from the Chinese mainland market, the Hong Kong Council for Testing and Certification (HKCTC), the Hong Kong Accreditation Service (HKAS) and the Trade and Industry Department recently co-hosted a seminar on these opportunities for Hong Kong's T&C industry.

The seminar featured representatives from the Certification and Accreditation Administration of China (CNCA) to explain details of liberalization measures, as well as discuss the status quo and future opportunities.

"The Chinese mainland has been opening up its market to Hong Kong's T&C industry in recent years. The latest Guangdong Agreement opens up a doorway larger than before," said Ching Pakchung, chairman of HKCTC, at the seminar.

T&C is not only a vital part for trade, but also a significant tool in ensuring the safety and quality of products for better living. In 2013, there were about 610 private T&C organizations in Hong Kong, according to the latest statistics.

The liberalization measures under the Guangdong Agreement have been welcomed warmly by industry players in Hong Kong. There is a general expectation from industry experts that the liberalization measures will bring about positive impacts to the industry. Under the Guangdong Agreement, local testing organizations accredited by HKAS, in cooperation with designated mainland organizations, will be a valid choice for undertaking testing of products under the "audio and visual apparatus" category of the CCC System which are designed and prototyped in Hong Kong, as well as processed or manufactured in Guangdong.

The CCC mark is needed for a range of products sold on the mainland, including the category of "audio and visual apparatus", which in the past had to be tested by a designated mainland testing organization.

Now the manufacturers and suppliers have another option, Hong Kong's T&C services.

Carrying a high international reputation and a proven record, Hong Kong's T&C industry has been assisting factories on the Chinese mainland in testing products for export.

Daniel Yau, vice-president - electrical, North East Asia of Intertek, said he is confident that the international experience and acclaim of the Hong Kong testing organizations will be an advantage when competing with other similar organizations outside Hong Kong, especially to the many manufacturers who run both domestic and overseas businesses.

"The T&C industry in Hong Kong is renowned for its integrity and professionalism, and we stand among the top of our peers," Yau said.

"Apart from testing against Chinese domestic standards and specifications, we can also test to various standards adopted in other countries and regions such as the United States and Europe. It is more convenient and efficient for the manufacturers as they can have their products tested to various standards in one go. Hong Kong has an obvious edge in terms of providing a one-stop solution in testing services," Yau added.

Yau also noted that Hong Kong testing laboratories have their share of difficulties and challenges, including intense competition from existing industry players on the Chinese mainland market, and the geographical location of Hong Kong laboratories being distant from some regions where products are manufactured.

"Clients will consider it an advantage if their T&C service providers are located in proximity to their factories. If a laboratory is in the neighborhood, the factory engineer will have better access to the laboratory's service. That said, the rapid advance in electronic communication has shortened the distance. Besides, Hong Kong is the base of many designing and sourcing offices," Yau said.

As for the T&C industry on the mainland, Chen Ying, director general of the Department for International Cooperation at CNCA, reported at the seminar that the respective market size is expected to reach 250 billion yuan ($40.3 billion) in 2015.

The "real market" lies in the field of voluntary certification, said Shen Tao, director of the International Department at the China Quality Certification Center.

Shen said there is potential demand for T&C services outside the product categories under the mandatory CCC system.

Voluntary certification includes certifications promoted by the government, such as those on energy saving and carbon emissions, and also market-driven certifications developed by the T&C industry.

"The concept and adoption of certification in China is currently at an early stage, as consumers and industries are not very aware of the benefits brought about by certification," Shen said.

He added that the T&C market has enormous growth potential if the benefits of voluntary certification are widely understood. Under the Guangdong Agreement, in the area of voluntary certification, testing organizations in Hong Kong can cooperate with the Chinese mainland certification bodies to undertake testing of products manufactured or processed in Hong Kong or on the mainland.

Regarding the CCC System, the Guangdong Agreement only covers the category of audio and visual apparatus, and the industry anticipates the cooperation will expand to other product categories when conditions are ripe, said Wang Junfeng, deputy director of the Department for Certification of the CNCA.

The CEPA liberalization measures have presented opportunities for the local T&C industry to lend support to manufacturing industries on the Chinese mainland. Hong Kong's T&C industry will serve as a window for foreign products to be imported into the mainland market.

"In the future, with more opportunities provided by the CEPA to further openings to Hong Kong, Hong Kong will be able to make a greater contribution in the CCC System," said Ching.

iris@chinadailyhk.com

(China Daily 08/26/2015 page7)