7
The first is: will the diversion of capital, plant, and skill
from Hong Kong to China, and also the development of industry in China
for export, undermine Hong Kong's prosperity through competition in
third markets?
The answer is, I can see no advantage whatever to China in
undermining Hong Kong's prosperity.
Moreover, the process of being under-cut at the bottom end
of the market, and of disinvestment from Hong Kong into lower-cost
areas of production, have always been as continuous a part of our
economic history as the parallel process in Hong Kong of movement into
high technology industry through investment.
So there is nothing new, in principle, or necessarily daunting
in practice about this prospect.
The second is: will the development of interchange of semi-
manufactures between Hong Kong and China call in question our certi-
ficates of origin?
This would indeed be a very serious matter, but the answer
is that it should not in fact, because the bases on which our certificates
are issued are quite clear, internationally agreed, and scrupulously
enforced by the issuing authorities here our economic survival
depends on it.
anong
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fancy and rumour could
However, though we should be safe on fact, fancy
protectionist lobbies or competitors abroad
be damaging.
So exporters must be particularly careful to do nothing which
could give grounds for such rumours, and for our part we must be alert
to any allegations, however informal and unfounded, and rebut them as
soon as they are made.
To sum up,