XN000022-1996-10-24 — Page 6

5

=

Hong Kong remains attractive to manufacturing activities

Hong Kong remains an attractive location for off-shore manufacturing activities and will have a dominant role to play in future as a manufacturing centre, the Director- General of Industry, Mr Francis Ho, said today (Thursday) in Australia.

"Using Southern China's more economical land and labour, Hong Kong manufacturers are locating their low end, high volume and labour intensive operations in China," said Mr Ho in addressing an investment promotion seminar in Melbourne in which he outlines the current industrial scene of Hong Kong.

"On a smaller scale, they also diversify their low cost operations to other Southeast Asian countries, and indeed to other parts of the world.

"To date, Hong Kong's manufacturers employ, directly or indirectly, at least four million workers in Southern China alone."

The figure was many times the size of Hong Kong's own industrial labour force, said Mr Ho, emphasising that the territory remained the nerve centre controlling the relocated labour intensive operations and providing front-end and back-end support to them.

Commenting on the suggestion that the economy of Hong Kong had a problem of "hollowing out", Mr Ho said: "The essential and high value added activities are still conducted in Hong Kong, building on its comparative advantage in its excellent infrastructure, its efficiency and business exposure.

"Indeed, the expansion of Hong Kong's manufacturing activities has generated much of the demand on the provision of the supporting services, such as trade financing, insurance, freight and cargo handling services, etc.

"And needless to say such demand reinforces the development of Hong Kong's service industries."

Looking forward, Mr Ho said given the vast pool of applied R&D expertise in China, and Hong Kong's happy knack for commercialisation and product development, there was plenty of room for collaboration between the Mainland and Hong Kong in undertaking applied R&D, developing new products and producing, marketing and distributing them.

"By leveraging on the availability of a huge and resourceful hinterland in China," Mr Ho said: "the manufacturing base of Hong Kong and its capability have expanded enormously."