17.
SECTION 3
SUPPLY FACTORS
INTRODUCTION AND CONCLUSIONS
3.1 At present Hong Kong and Singapore both enjoy positions as regional financial centres. Their respective infrastructures and factors of production are well developed and well suited to this
role.
3.2 Their development as regional financial centres must be closely associated with their industrial development and their roles as major ports and entrepots, thus providing eg trade finance and insurance services as well as the physical infrastructure to facilitate the flow of both the goods and services. Singapore boasts the busiest port in the World. Hong Kong has the second largest port in the world through which one third of China's imports and exports are at present obliged to pass. The financial services that are generated by this trade will not vanish or be relocated rapidly. Indeed, we are positing that between 1991 and 1995 China's exports will grow by around 8-9% in value per annum, imports by an average of 13-14%. this basis Hong Kong will be handling nearly US$60 bn of China's total trade by 1995, against US$18 bn in 1985. China currently uses Hong Kong to transship 70% of its US exports and 60% of its exports to Germany and this relationship is again one that is unlikely to
change rapidly.
On
3.3 Hong Kong's position can be contrasted with Taiwan, which has aspirations to become a regional financial centre. Its financial sector is probably more or less adept at allocating domestic funds for development and to finance international trade (notwithstanding the problems in the stock market gyrations a couple of years ago). However, the state of development in Taiwan indicates that they will not be in a position to compete as a regional financial centre until