XN000022-1979-01-19 — Page 22

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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,