(c)
(a)
(e)
CONFIDENTIAL
the possibility of increased competition in
overseas markets, although this would be likely to happen with or without Hong Kong
investments in China;
an increased possibility of major countries attempting to redistribute shares of
restricted import markets so as to accommodate
China;
there may be some drain on capital resources but this is not likely to be significant given the present flow of capital funds in
and out of Hong Kong and on the assumption that Hong Kong investors generally regard Hong Kong as the first choice as an investment
target.
Joint Development
11.
6.
The notion that "China has cheap land and cheap
labour, Hong Kong has capital and manufacturing and marketing expertise; therefore there is a basis for co- operation in development" is on the face of it an enticing one. Theoretically, if it were politically possible, the
best economic result from Hong Kong's point of view would
be to lease another 500 square miles from China for 99
years. This is clearly quite unrealistic politically. The kind of development currently taking place in Shum Chun/Kwangchow is about all that can be expected. development is essentially a matter for the private
sector in Hong Kong and if complementary industries which
require more land or more labour than is feasible in Hong
Kong can be developed across the border it would be to the good. An example would be high quality foundry facilities.
Such
CONFIDENTIAL
/contd...
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