CONFIDENTIAL # 3
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commercial and service sectors would continue, but industrial and agricultural activities were likely to be concentrated in Guangdong. In the long run, this might
be good for Hong Kong, but reaching that stage carried risks, especially for manufacturing industry and employment in Hong Kong: rapid development would require
painful adjustments. If jobs were relocated outside Hong Kong, workers could not move with them, so there would be
a need for new jobs in Hong Kong to be created in
different areas. There would also be a need for new types
of training, not only in science and technology, but also in business and management. In sum, while Hong Kong was valuable to China, the Chinese economy was increasingly important for Hong Kong. As a continental economy, China was relatively self-sufficient and could if necessary cut back on outside links, which would be damaging to Hong
Kong. Hong Kong was only vitally important to China while
it remained different.
21.
SDA suggested that as the open policy developed and other
places in China gained greater outside access, the balance
of Hong Kong's relationship with China might move more heavily to Guangdong. DS(ES)2 agreed in part, but drew attention to the planned double-tracking of the railway from Peking to Shenzhen. The Chinese presumably envisaged large flows of people and traffic to Hong Kong, which remained the best open port on the Chinese coast.
22. STI drew attention to the differences between Hong Kong
and China's positions in the GATT. Hong Kong enjoyed MFN
status in trade with the developed world. China would
almost certainly have to pay a price for re-entering the
GATT, probably in terms of unilateral restrictions. He
envisaged that these might be to the advantage of Hong Kong industries. DS(ES)2 agreed, but said that the shift
of manufacturing industry to China would be delayed rather than prevented. This could give rise to problems over
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