In the short term, the upward pressures on costs and prices should help to restrain demand to a level which is more with the economy's productive capacity. As this occurs the demand for labour should become less intense. Beyond this short-term, cyclical adjustment in demand, however, the slow and declining growth rate of the labour force is becoming a long-term structural impediment to economic growth.
10
Under existing policy, imports of labour for redressing shortages are largely confined to the professional and managerial level, and to a limited extent to the technician, supervisory and craft levels.
This policy is based on the premise that the pressure of demand for labour will, on the one hand, induce employers to raise labour productivity through investment and training, while enabling the local workforce to take on more rewarding jobs and share in the fruits of Hong Kong's economic growth, on the other. Developments over the past few years have borne out much of these favourable effects.
11
In any re-appraisal of existing policy from a longer term perspective, these fundamental premises must not be unduly compromised. However, it must be borne in mind that Hong Kong's industries are relatively labour intensive, regardless of whether they belong to manufacturing or the services sector. Indeed, it can be argued that the continuing shift from manufacturing to the services sector could render Hong Kong even more dependent on labour than is the case at present. In the circumstances, if securing the public interest means sustaining a fairly high rate of economic growth, it would be necessary to ensure that our industries are able to obtain the means of increasing their productive capacity. Whilst encouraging them to invest in new plant, machinery and improved processes, it is necessary to recognise that there are limitations to capital investment as a substitute for labour, and that such investment might not take place unless it is also complemented by an adequate supply of labour at all levels of competence and experience.
12
Given Government's commitment through the 1990s to massive infrastructural development, including the new airport, port facilities and related transport links, demand for construction output is expected to add substantially to the load on the construction industry. In order to cope with such a construction workload without having to bid away an excessive proportion of labour resources from other industries, thereby in turn affecting their performance adversely, a good case appears to exist for more lenient treatment regarding applications for importation of construction workers.
13
to
In summary, having regard
the need to complement capital investment, to stimulate growth in the productive capacity of the economy, and to cater for the heavy load on the