Hong Kong thrives as major fur trading center.

HONG KONG, CHINA (FEBRUARY 26, 2008) (REUTERS)- Hong Kong's climate may be subtropical, but the city is a major hub for fur trading, selling expensive coats and accessories to retailers from colder countries such as Russia and Finland.

At Hong Kong's annual fur fair, tall skinny models show off elaborate Hong Kong designed furs, ranging from full length white coats to grey furs with a large fluffy hood.

Buyers from around the world watch on, eyeing style, colour and price.

Anti fur protesters claim that people are wearing less fur coats than they used to. But according to the International fur trade organisation fur retail sales hit $13.5 billion dollars in 2006, growing 5.6 percent from the previous year. Hong Kong produces 80 percent of the world's fine fur garments, according to the city's fur federation.

Newly emerging and cold climate markets such as Russia and China have added to a blossoming of demand for fur coats.

Major fashion houses have started adding more fur to their designs and younger designers are playing with fur style and colouring.

"Russia is our main fur market, it occupies 50-percent of our market share," said Sidney Lo, a sales manager at Dai-Ichi furs.

Chinese consumers are also snapping up a greater number of furs, with buyers from northern China attending the fair to examine the latest offerings.

Hong Kong's physical proximity to China manufacturing, coupled with family businesses based in Hong Kong has made the city a fur powerhouse.

"In terms of manufacturing they've got something that the rest of the world hasn't got. They've got access to a pool of labour in China that is highly skilled. The labour in western countries is aging. There isn't the capacity so Hong Kong has kind of grown into that position," said Timothy Everest, managing director at Cyril Murkin, a trader of fur pelts to Hong Kong fur makers.

The former British colony started in the fur business when trained furriers from Shanghai brought their skills to Hong Kong when the communists came to power in 1949.

Today most fur garments are again made in China factories but the businesses are run by many of the same families that started business here several generations ago.

29-year old Dennis Fong, is marketing director for International Fur, a company headed by his father. His family has been in the fur trade for 3 generations. He has recently started his own fashion line with the blessing of his family.

"My grandfather started the company and a few years ago I graduated from university and naturally I came here," said Fong amid racks of furs in his showroom at the fur fair.

Fung said most of his customers come from Europe due to his method of design, which uses more subtle colouring. Coats range from several hundred dollars to about $30,000 a piece wholesale depending on the type of fur.