TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 68

BRIEF 8

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the apparent lack of industrial diversification, manufacturing

has maintained its adaptability. Garments and textiles have

continued to edge up-market, and Hong Kong is well placed in the

greatest of growth industries at the moment, electronics.

The recent influx of immigrants from China and the absorption of many

Vietnamese refugees into the workforce while it may help to

alleviate the current labour shortage and indeed enabled Hong Kong

to meet a better external demand last year than was expected is

likely to impose a considerable strain on the Territory's resources.

In the short term a coincidence of immigration with world recession

may produce higher unemployment and a sharp fall in real wages.

Immigration is the dark side of the new economic relationship with

China that has brought benefits in so many other ways.

Overall, Hong Kong stands to gain from the growth of closer

economic links with China, in particular with the development of the

›rder Province of Guangdong both in its re-emerging role of significant

entrepot port and as a source of finance, services and expertise for

collaborative enterprises. Hong Kong serves China's interests in providing

a "laboratory" within which China's trading, banking and other organisations

can gain experience of conducting business in a market economy and where the

transfer of technology from advanced economies to China can be facilitated.