THE ROLE OF OVERSEAS INVESTMENT IN HONG KONG'S INDUSTRY
contribution to Wah Kiu Yat Po Supplement by Jimmy McGregor, Director of
The Hong Kong General Chamber of Commerce
Of course, in the final analysis no company decides to set up a plant in Hong Kong, or any other territory, for any reason other than profit. It would be naive to think otherwise. Any territory offering itself as a site for overseas investment must be able to satisfy this most basic of requirements. But this is where many countries get into some difficulty. They do not like to admit the profit motive. The very word 'profit' is regarded with a measure of distaste.
Profit can be confused with exploitation or profiteering and depending upon the political system of the country concerned, ways and means are found to make the word sound less objectionable and capitalistic. But Hong Kong is a capitalistic society where profit is not a dirty word. In fact profit is the name of the game.
A major Incentive in Hong Kong, one that is much appreciated by the overseas manufacturer, is the freedom from the dead hand of the bureaucrat. There is a unanimous chorus of assent from business quarters to the suggestion that the status quo should be maintained in ths regard. While the government is willing to encourage and assist in the development of industry and. business, it does nto attempt to decide precisely which industry or business should be established: that is a decision for the industrial Investor. Hong Kong's economic development has reached a stage where it is impossible for the government not to be directly involved in most aspects of industrial and economic development. But the philosophy of minimum Interference, the bellef that business and industry can best meet the challenges of worldwide competition only if it is left as free as possible to get on with its corporate task, remains,
We have in Hong Kong at the present time more than 380 industrial factories which are either wholly or partly foreign owned. They employ more than 70,000 workers, or nearly 9 per cent of the total manufacturing workforce. Last year they probably accounted for about 10 per cent of Hong Kong's total domestic exports. The capital employed by these plants is estimated at more than $2,000 million and among them are many well-known names: Daw, Outboard Marine, Fairchild, ITT, Philips, Sanyo, Mattel, YKK and a host of others.
Overseas investment in the electronics industry alone is valued at well over $600 million and overseas technology and capital have played a pioneering role in the introduction and subsequent growth of this industry in Hong Kong. Other industries with substantial overseas participation are textiles and garments, chemical products, electrical products, printing and watches and clocks,
Overseas companies have been very good for Hong Kong – and I think it can be fairly said that Hong Kong has been very good for them. They have helped to establish new Industries, new techniques and processes, new standards and new concepts in production, market and labour traning. In the forefront of our technology, they have been and will remain very welcome here.
It is all very well being an ideal location, for overseas investment. But it is still necessary to get out and promote our attractions vigorously. The Chamber is involved in an active programme of overseas Industrial Investment promotion, together with the Hong Kong Government. Eight promotion missions have been organised by the Chamber sometimes with Government participation since 1976. At the time of writing an Investment promotion mission, consisting of our representative in the United States, Herb Minich, an executive from our Industry Division, Sidney Fung, and an officer from the Trade Industry & Customs Department, Paulus Chan, is busy meeting top officials of about 40 companies In the north eastern part of the United States. Many of these companies appear to be genuinely interested in the possibility of establishing some form of regional office or even industrial production facilities. In Hong Kong and past experience suggests that some of them may be persuaded to come to Hong Kong as a rasult of the mission,
Hong Kong faces the future in good shape. Our export performance remains strong, despite fierce competition from other developing countries and growing signs of protectionism among some of the developed countries. Our industrial development is entering a new phase, one where the emphasis is on high-technology rather than low-cost, mass production, Much of our future growth will undoubtedly be generated from our own skills and experience. But foreign investment will remain an important ingredient in our overall development.
The situation of Hong Kong is a via China is, of course, critical to our future and to the level of confidence that investors must have in working a decision to locate possibility in Hong Kong. I believe strongly that there are very good reason for China to agree to maintain the status pro of Hong Kong for at least the next thirty years thus providing a firm basis for close cooperation between the two territories to their continuing mutual advantage. The future is bright.
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