41.
and supersonics.
the cost itself.
the field of the
CONFIDENTIAL
This was refused because of the colony's
own interest in the development and its being able to bear
If AG wished to gratify Hong Kong outside
E20 negotiations, there might be a wish to
re-examine this, though there are no existing funds
available for a UK contribution.
Another suggestion is that funds for investment in order
to diversify Hong Kong's industry might be found either
from a sterling balance or from provision of aid from
United Kingdom. So far Hong Kong has not found difficulty
in raising capital for investment, and has not been short
of foreign exchange. Diversification has not been limited
by lack of capital, but by her lack of natural resources and
her social structure. But if she invests in new industries,
she will still require an outlet for their products. The
prerequisite for continued investment in Hong Kong's
industry is primarily confidence in the stability of the
colony (and it is already entering the shadow of the expiry
of the new territories in 1997) and consequently confidence
that the products of the industries can be exported. It
seems most unlikely that the provision of aid will be
required, or would lead to a solution of any of Hong Kong's
likely difficulties in the next decade.
42.
VII
CONCLUSIONS
Hong Kong's rapid development in recent years, which has more
than kept pace with her fast increasing population, has been
led by exports of manufactures, especially textiles. She is,
however, now beginning to lose her competitive advantage
because of increasing wages, the second highest in Asia.
/43.
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