5.
10.
(c)
(a)
(e)
(f)
(g)
(a)
(b)
CONFIDENTIAL
the financial advantages which Hong Kong's financial and professional organisations would gain through the services they provide;
Hong Kong manufacturing firms which invest in China through whatever arrangements generally end up with the goods produced to market. Thus there is a value added which might not otherwise accrue to Hong Kong if no investment were made;
the possible production of goods needed by Hong Kong at prices lower than those currently available;
the remittance to Hong Kong of profits generated by the investments in China;
in some cases, China may provide the opportunity for Hong Kong manufacturers to transfer existing equipment out of their Hong Kong factories and thus making it easier for them to introduce more advanced equipment.
Likely disadvantages include the following:
there may be some diversion of entreprenurial energy and management effort across the border to the detriment of Hong Kong's development but this is unlikely to be a major disadvantage;
the risk of an overseas reaction, whether justified or not, against Hong Kong goods on the grounds they were made wholly or partly in China;
CONFIDENTIAL
/contd....
1