XN000022-1989-04-28 — Page 7

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FRIDAY, APRIL 28, 1989

CENT FORECAST

REGISTERED 15 PER HE SAID LAST YEAR GUANGDONG PROVINCE GDP GROWTH AND 31 PER CENT INDUSTRIAL GROWTH; THE LATTER WAS BY EXPERTS TO RISE BY 20 PER CENT THIS YEAR.

"THE CHINA FACTOR HAS BECOME THE MAIN IMPETUS TO THE GROWTH OUR PORT,

OF

RETAIN IT'S

"WE CONFIDENTLY EXPECT THAT HONG KONG CAN AND WILL LEADING POSITION AS A PORT SERVICING BOTH THE REGION AND SOUTH CHINA,' MR STRACHAN SAID.

EC SINGLE MARKET MIGHT AFFECT INVESTMENT TO HK

THE ACTING DIRECTOR OF INDUSTRY, MR ANDREW LEUNG KIN-PONG, TODAY (FRIDAY) NOTED THAT THE CREATION OF THE EUROPEAN COMMUNITY (BC) SINGLE MARKET SYSTEM IN 1992 MIGHT KEEP SOME OVERSEAS INVESTMENT AWAY FROM HONG KONG.

ONCE THE INTERNAL EUROPEAN MARKET WAS ESTABLISHED. MR LEUNG SAID, INVESTMENT BY EUROPEAN COMPANIES IN PRODUCTION MIGHT CONCENTRATE INSIDE EC BOUNDARIES TO AN EVEN GREATER EXTENT.

+

HE NOTED THAT SOME POTENTIAL OVERSEAS INVESTORS IN HONG KONG'S MANUFACTURING INDUSTRIES, INCLUDING AMERICAN AND JAPANESE COMPANIES, HAD CONCLUDED THAT, TO EXPORT TO EUROPE. THEY SHOULD BE BASED IN EUROPE RATHER THAN HONG KONG ΤΟ COMPLY WITH ANY INCREASE IN THE PROPORTION OF LOCAL VALUE ADDED TO PRODUCTS THAT THE COMMUNITY MIGHT REQUIRE.

MR LEUNG SAID, IF HONG KONG FAILED TO ATTRACT OVERSEAS INVESTMENT TO ITS MANUFACTURING INDUSTRIES, IT MIGHT HINDER THE GROWTH OF TECHNOLOGY TRANSFER, FRODUCT DIVERSIFICATION TECHNOLOGICAL ADVANCEMENT IN LOCAL PRODUCTION INDUSTRIES.

AND

MR LEUNG

TURNING TO THE CAPABILITY OF HONG KONG MANUFACTURERS, SAID HE COULD FORESEE THAT PRODUCTION FOR ALL EC COUNTRIES WOULD BE UNIFORM AND LARGER PRODUCTION RUNS WOULD BECOME POSSIBLE AFTER 1992.

"HOWEVER, THE GENERALLY LARGER MANUFACTURERS OF EUROPE, THE USA AND JAPAN ARE LIKELY TO BE BETTER ABLE, THAN SMALL HONG KONG MANUFACTURERS, TO BENEFIT FROM ECONOMIES OF SCALE 1N MANUFACTURING AND DISTRIBUTION," HE SAID.

OUT OF THE 50,000 MANUFACTURING COMPANIES IN HONG KONG, MR LEUNG SAID, ONLY ONE PER CENT HAD A WORKFORCE OF OVER 200,

IF HONG KONG WAS ΤΟ CATER FOR THE EUROPEAN MARKET WITH A POPULATION OF 3.2 BILLION, LOCAL MANUFACTURERS HAD ΤΟ CONTINUE то INVEST IN PRODUCTIVITY, QUALITY AND INNOVATIVE CAPABILITY, HE SAID.

/MR LEUNG