Garment makers based in Hong Kong but with plants in China are using "outward processing arrangements" (OPA) that allow manufacturers to claim their goods are made in the Special Administrative Region of Hong Kong, provided some work on the goods takes place there.

"Suddenly production in Hong Kong has surged. Suddenly Hong Kong is becoming an exporting country again," said Wing Hin Chung, director of garment manufacturer Hansa Trading Ltd.

Hong Kong's textile and clothing re-exports to the European Union and the United States rose 80 percent and 33 percent respectively from April through July, according to the Hong Kong Trade and Industry Department (TID).

Combined re-exports to the two markets totalled HK$57.2 billion (US$7.3 billion) in the second quarter of 2005, up 49 percent from a year earlier and matching total mainland Chinese textiles exports to the United States in the first half of 2005.

The figures may suggest... that Hong Kong is moving towards servicing the textile and clothing trade in the region," Trade and Industry Department (TID) spokeswoman Connie Man said.

OPA status for exported goods requires that their "principal manufacturing processes" be conducted in Hong Kong, a TID document says. Some industrialists question whether all OPA garments are what they claim to be.

"Where is it being produced? Where are all the workers coming from? Where are all the factories coming from?" one small manufacturer raised questions.

Chinese shipments to the United States and the EU surged when a global quota system ended on Jan. 1 this year.