XN000022-1981-01-22 — Page 19

and laws

9

China is dramatic; in the first eleven months of 1980, re-exports to and

from China as a whole grew by 85% in money terms compared with those in the

corresponding period in the previous year.

Moreover, I should expect the relationship with China to grow.

I believe the developments at Shenzhen and Shekou will proceed and that

possibilities-in Guangdong generally

and Fujian, and indeed in the rest of China,

will attract increasing investment and participation by Hong Kong businessmen.

And I should expect this process to grow as Chinese commercial policies/are defined

and stabilised, and as confidence in their continuity grows.

While some

technical aspects must be watched for instance certificates of origin

-

I see no danger in principle in any of this for Hong Kong, indeed quite /the development of Guangdong and Hong Kong are complementary. the reverse, /There could well be room for net expansion of Hong Kong

materials and

industry through the lower costs of some/components if they were produced

in China instead of imported from oversees, and if some land intensive

processes were moved north of the border. Equally to be welcomed is the

expansion of investment in Hong Kong by agencies of the Chinese government.

One way in which the goverment can assist the success of our

Advisory exporters is by implementation of the recommendations of the Committee on

Diversification. These were designed to enable Hong Kong to strengthen

its economic position in the 80s by increasing the supply of industrial

land, improving industrial support facilities and technical back up

services, and strengthening present arrangements for both trade promotion

and industrial investment promotion. All these things and there were

implemented 47 recommendations in all - are being

with the urgency that they

deserve and 1981 will see a host of govemment-based or government-led

activities aimed at assisting industry to move into the 80a.

/Gentlemen, I .....