XN000022-1986-11-14 — Page 4

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FRIDAY, NOVEMBER 14, 1986

REGARDING ECONOMIC LINKS, MR YAXLEY POINTED OUT THAT THE SE WERE INCREASINGLY EXTENSIVE AND REFLECTED IN THE RAPID

DEVELOPMENT OF CROSS BORDER INFRASTRUCTURE; ROADS AND BRIDGES, RAIL, AIR AND SHIPPING.

TURNING TO THE FUTURE, MR YAXLEY OUTLINED THREE MAIN ECONOMIC TRENDS FOR HONG KONG.

FIRSTLY HE NOTED THE NEED FOR FURTHER TECHNOLOGICAL ADVANCES IN THE MANUFACTURING INDUSTRY, BUT REITERATED THAT DESPITE COMPETITION FROM WITHIN THE REGION AND THE GOVERNMENT BEING CONTINUALLY UNDER PRESSURE TO SUBSIDISE INDUSTRY, PARTICULARLY THE ELECTRONICS INDUSTRY, THAT WAS A PRESSURE THE GOVERNMENT WOULD RESIST.

THE SECOND TREND WOULD BE THE FURTHER DEVELOPMENT OF THE SERVICES SECTOR, IN PARTICULAR THE FINANCIAL COMPONENT OF THE SECTOR. +I DON'T THINK WE ARE GOING TO RIVAL TOKYO OR LONDON OR NEW YORK. SEE HONG KONG AS A SECOND LEVEL REGIONAL FINANCIAL BASE.+

MR YAXLEY SUGGESTED THE SECTOR WOULD DEVELOP IN RELATION TO HONG KONG'S OWN ECONOMY AND, MORE IMPORTANTLY, WOULD DEVELOP TO SERVICE CHINA,

AS FOR THE THIRD TREND, THE FURTHER DEVELOPMENT OF HONG KONG-CHINA ECONOMIC RELATIONS, MR YAXLEY PROPOSED THAT THE TERRITORY WOULD BE A CONDUIT FOR THE INTRODUCTION OF NEW TECHNOLOGIES WHICH WOULD BE NEEDED BY CHINA.

+CHINA'S SEVENTH FIVE-YEAR PLAN, WHICH COVERS THE YEARS 1986 TO 1990, CALLS FOR ANNUAL GROWTH RATES OF SEVEN PER CENT. NOW CLEARLY THERE IS A ROLE HERE FOR HONG KONG TO PLAY IN ASSISTING CHINA TO MEET THOSE ECONOMIC TARGETS.+

+CHINA WILL ALSO NEED CONSIDERABLE INVESTMENT IN INFRASTRUCTURE IN RAILWAYS, IN ROADS, IN PORTS AND IN POWER. AND HERE HONG KONG IS ALREADY PLAYING A ROLE, MR YAXLEY NOTED.

ON POLITICAL PROSPECTS, MR YAXLEY SAID THAT THE JOINT DECLARATION SIGNED BY BRITAIN AND CHINA TWO YEARS AGO CHARTED A UNIQUE COURSE FOR HONG KONG TO BECOME A SPECIAL ADMINISTRATIVE REGION OF CHINA WHILE PROVIDING FOR THE CONTINUATION OF ITS WELL KNOWN LIFESTYLE AND ITS ECONOMIC SYSTEM.

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