HE: Mr. TAM Yiu chung.
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Mr.
TAM
in Cantonese).
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وضنا
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Sir, although this is only the Financial Secretary's second Budget, he has responded to many requests made by Members of this Council and has improved on the Budget format. Such readiness to accept advice should be welcome.
I believe the Financial Secretary and others in the Finance Branch will
continue to learn from experience in financial planning elsewhere for purposes
of improvement. I would like now to speak on some trends in Hong Kong's
economic development and on taxation.
NP. In Paragraph 14 of the Financial Secretary's Speech he says and I quote:
"Local producers have also made significantly more use of outward processing
facilities in China. This increased intra-relationship of our economy with
was that of China a marked feature of last year and seems likely to continue this year.* The Secretary has very accurately reflected such a phenomenon. Hong Kong has become one of the largest sources of investment in China.
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Changdong,
By the end of June 1987, it is estimated that 80 per cent of foreign investment
plans in China are from Hong Kong and Hong Kong accounts for 65 per cent of 20 the total foreign investment. It has been observed that much of the increased
investment is in Kantong especially in the Pearl River Delta. I believe that many of the investment items are productive capital. Many factories invest in China in four areas: processing of materials, assembly of parts,
production according to specifications and compensation trading. According to the Government's estimate, up to a million workers have been employed in this way in China. Among industrialists who have moved to the Pearl River
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27 Delta, some only transferred some processers and orders, but on the other
hand, some have terminated their investment in Hong Kong altogether and moved completely to China. [Such
Such a trend in economic development has led to rapid development in the Delta area and has also led to very drastic increases in the re-export trade in Hong Kong. Now what other economic and social implications are there? I am not an economic expert, but I believe that it would be helpful in working out own micro-economic development if
we fully grasp this situation.
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First, I would like to speak on the implications of this inter-relationship