XN000022-1992-07-07 — Page 3

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TUESDAY, JULY 7, 1992

IDENTIFYING SOME OF THE TRENDS, MR CHAU SAID MANUFACTURING INDUSTRIES WERE GROWING RAPIDLY.

"AS LABOUR-INTENSIVE PRODUCTION PROCESSES ARE SHIFTED OVER THE BORDER TO CHINA, THE HONG KONG BASE IS ABLE TO TRADE UP INTO VALUE- ADDED SERVICES RELATED TO MANUFACTURING

AND PRODUCT DEVELOPMENT DESIGN, QUALITY CONTROL, MARKETING, PACKAGING AND SO ON.

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TAKING THE TOY INDUSTRY AS AN EXAMPLE, MR CHAU SAID HONG KONG- BASED OUTPUT HAD FALLEN STEADILY FOR THE PAST FIVE YEARS.

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"BUT HONG KONG IS STILL A MAJOR CENTRE FOR TOYS, AND STILL MANY LARGE AND PRESTIGIOUS TOY-MAKERS. THOSE COMPANIES NOW CARRY OUT A LARGE PROPORTION OF THEIR OPERATIONS THROUGH OUTWARD PROCESSING IN CHINA, WHILE DOING THEIR PRODUCT DEVELOPMENT AND HIGH-TECHNOLOGY PRODUCTION IN HONG KONG.

IN TOTAL, SOME 60 PER CENT OF HONG KONG'S TRADE WITH CHINA RELATED TO OUTWARD PROCESSING, HE SAID.

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HE SAID ANOTHER TREND WAS THE MOVING OF LOCAL INDUSTRIES INTO MORE SOPHISTICATED AND HIGHER VALUE-ADDED MARKET SEGMENT.

"IN THE ELECTRONICS INDUSTRY, COMPUTERS AND PERIPHERALS HAVE SHOWN STRONG GROWTH IN RECENT YEARS. JEWELLERY EXPORTS HAVE ALSO BEEN BUOYANT. AND IN THE TEXTILES AND CLOTHING INDUSTRY, THE EMPHASIS QUALITY AND FASHION HAS NEVER BEEN HIGHER.

"MANUFACTURERS ARE NOT JUST UPGRADING THEIR PRODUCTS: THEY ALSO UPGRADING THEIR PROCESSES, MR CHAU SAID.

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"INDUSTRY IS INVESTING IN A MAJOR WAY IN NEW EQUIPMENT: RETAINED IMPORTS OF MACHINERY FOR INDUSTRIAL USE OVER THE PAST THREE YEARS TOTALLED $28 BILLION.

"THAT REFLECTS THE FACT THAT AUTOMATION IS ON THE INCREASE. INDEED, MANY PLAYERS BOTH LOCAL AND OVERSEAS HAVE GONE FOR STATE- OF-THE-ART INDUSTRIAL PROCESSES.

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"COMPANIES AT THE TOP OF THE TECHNOLOGY LADDER TEND TO BE CONCENTRATED IN THE ELECTRONICS INDUSTRY. BUT THEY CAN ALSO BE FOUND ELSEWHERE. TAKE THE TEXTILES INDUSTRY, FOR EXAMPLE: HONG KONG NOW HAS SOME OF THE MOST UP-TO-DATE COMPUTER-DRIVEN TEXTILES MACHINERY IN THE WORLD.

A THIRD TREND IS HONG KONG'S INDUSTRIES ARE CAPITALISING ON NEW MARKET OPPORTUNITIES.

"LINKAGE INDUSTRIES ARE A CASE IN POINT. AS INDUSTRIAL ACTIVITY IN SOUTH CHINA HAS BOOMED, SO TOO HAS CHINA'S DEMAND FOR HIGH QUALITY MATERIALS, COMPONENTS AND INDUSTRIAL MACHINERY," MR CHAU SAID.

"HONG KONG'S LINKAGE INDUSTRIES HAVE DEVELOPED RAPIDLY IN RESPONSE: IN 1991 MORE THAN 50 PER CENT OF THEIR TOTAL EXPORTS WERE TO CHINA," HE SAID.

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