Outward Processing Arrangement
Encyclopedia
The Outward Processing Arrangement (OPA) concerns the textile
industry in Hong Kong
and the People's Republic of China
. It states that Hong Kong manufacturers can subcontract subsidiary and finishing
processes to mainland factories, as long as the "major transformation" of the garment takes place in Hong Kong. Major transformation, however, only need to amount to 10% of cloth processing. Effective from 10 June 2005, Hong Kong manufacturers can apply to the Trade and Industry Department of Hong Kong for exemption of export
duty in association with the processed garments as they are being exported from China.
Textile
A textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...
industry in Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
and the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. It states that Hong Kong manufacturers can subcontract subsidiary and finishing
Finishing (textiles)
In textile manufacturing, finishing refers to any process performed on yarn or fabric after weaving or knitting to improve the look, performance, or "hand" of the finished textile or clothing...
processes to mainland factories, as long as the "major transformation" of the garment takes place in Hong Kong. Major transformation, however, only need to amount to 10% of cloth processing. Effective from 10 June 2005, Hong Kong manufacturers can apply to the Trade and Industry Department of Hong Kong for exemption of export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
duty in association with the processed garments as they are being exported from China.