XN000022-1988-04-19 — Page 4

TUESDAY, APRIL 19, 1988

MADE

IN

HONG KONG ENTREPRENEURS HAD

IMPRESSIVE 1NROADS EXPLORING THE CHINA MARKET AND HONG KONG WAS NOW CRINA'S LARGEST TRADING PARTNER, HE SAID.

SINCE HONG KONG WAS JAPAN'S FIFTH LARGEST EXPORT MARKET, THERE WAS A STRONG CASE TO SET UP MANUFACTURING OPERATIONS IN HONG KONG FOR SUPPLYING THE MARKET DOMESTICALLY, HE ADDED.

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'ALTHOUGH UP TO THE PRESENT THE MAIN OBJECT OF DIRECT JAPANESE INVESTMENT IN HONG KONG'S MANUFACTURING SECTOR HAS BEEN TO ACHIEVE A SHARE OF HONG KONG'S EXPORTS ΤΟ THIRD COUNTRY MARKETS, THERE ARE ALREADY SIGNS THAT A SIGNIFICANT PORTION OF THE OUTPUT OF THIS INVESTMENT IS BEGINNING TO BE AIMED AT DOMESTIC CONSUMPTION.

"BY ESTABLISHING JAPANESE FACTORIES IN HONG KONG, THE TRADE IMBALANCE BETWEEN US CAN ALSO BE IMPROVED," HE ADDED.

MR LEUNG POINTED OUT THAT THE GOVERNMENT'S ROLE WAS TO PROVIDE A FAVOURABLE LEGAL AND PHYSICAL FRAMEWORK WITHIN WHICH PRIVATE ENTERPRISE COULD OPERATE SUCCESSFULLY AND TO SEEK WAYS OF IMPROVING HONG KONG'S OVERALL COMPETITIVENESS.

"THE KWAI CHUNG CONTAINER PORT IS NOW THE LARGEST IN THE WORLD

IN TERMS OF ANNUAL THROUGHPUT AND PROBABLY THE MOST EFFICIENT.

"WE HAVE ONE OF THE LARGEST AIR CARGO TERMINALS IN THE WORLD, WHICH IS CURRENTLY CAPABLE OF HANDLING 680,000 METRIC TONNES ANNUALLY AND IS BEING EXPANDED, HE SAID,

HE NOTED THAT HONG KONG'S EXCELLENT INTERNATIONAL AND DOMESTIC TELEPHONE AND TELECOMMUNICATIONS SERVICES OPERATED AT PRICES AMONG THE LOWEST IN THE ASIA-PACIFIC REGION, ADDING THAT HONG RONG WAS AN INTERNATIONALLY - RENOWNED FREE PORT WITH NO EXCHANGE CONTROLS.

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WITH REGARD TO INCENTIVES FOR INVESTMENT, MR LEUNG SAID THAT IN LINE WITH THE GOVERNMENT'S BELIEF IN EQUAL OPPORTUNITY FOR ALL, IT DID NOT OFFER ANY SPECIAL DEALS FOR EITHER LOCAL OR OVERSEAS INVESTORS.

NOTING THAT ALL THE MOST ESSENTIAL PACTORS FOR BUSINESS то OPERATE SUCCESSFULLY WERE ALREADY IN EXISTENCE IN HONG KONG, HR GAVE EXAMPLES OF THE RELATIVELY MILD AND STABLE TAX REGIME AND THP FREE ENTERPRISE ENVIRONMENT.

"OVERSEAS INVESTORS WOULD NOT HAVE TO SIGN TECHNOLOGY TRANSFER CONTRACTS OR TO MEET CERTAIN LOCAL CONTENT REQUIREMENTS," HE SAID.

"FOR THE OVERSEAS INVESTOR, INVESTMENT INCENTIVES MIGHT OFFER SHORT AND MEDIUM TERM ATTRACTIONS BUT, IN THE LONG RUN, THEY MAKE FOR INEFFICIENCY AND THIS LEAVES A FIRM ILL-PREPARED FOR THE DAY WHEN INCENTIVES RUN OUT, HE ADDED.

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