1. Towards Exports C. Following the pattern of wigs in the 60's, Hong Kong is now 'trading up' in each of its export markets - producing more delicately tinted plastic flowers and so charging a higher price - as it is being undercut by lower labour costs in the Philippines, Korea, India and Pakistan. But trading up in clothing has reached the top (of the big market). 26 men and 15 Chinese families control most of the 80 companies listed on the Stock Exchange.
15. R. (i) (Immediately) Focus on the Japanese
market " .. rigorous Government and private sector effort is necessary
Few people
16.
11
are better placed than Hong Kong to exploit the Japanese market, particularly in textiles.
(ii)
(Short term) Change the way of administering export quotas. The present system ("inequitable" and "inefficient") favours older established firms (with no economic rationale) and a system should quickly be found that allocates shares of the total quota according to the most recent actual shipments.
(iii) (Long run)
Introduce
11
...
some form of quota
auction (or other method of taxing away windfall profits)..
11
Towards Education C. Scarcity of land limits the scope for increasingly capital intensive industries. Growth in labour productivity (necessary to increase real wages) must therefore come from accumulation of skills, which requires a big (Government-run) education and training programme as well as assistance to industry in exploiting to the full the increased potential of the labour force.
17.
18.
R. (i) More management training schemes, particularly
for graduates and for middle managers (who are trained in the HK Productivity Center - which cannot expand further for lack of funds).
Towards Investment and the Transfer of Technology C. Hong Kong is no longer the bare piece of rock in the South China Sea whose acquisition Prince Albert laughed at. But its only lasting asset, in economic terms (a guarantee of the population's fortunes) is the skill of its labour force. Policy to attract foreign direct investment (ie subsidiaries of multinational firms) is crucial because of the new technology (including new management concepts) some foreign firms bring
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