TNAG-1172-FCO40-1453-Future-of-Hong-Kong-1982 — Page 3

ན་་ས

Chinese products, the ability of manufacturers in China to meet Hong Kong tastes and requirements as well as the increase of earnings of the population in Hong Kong. Growing supplies of food, fuel and daily necessitics from China are helping to relieve the people from high prices and thus form a support to stabilize labour costs for Hong Kong industry

and trade.

For the foreseeable future, China will still have to rely on labour Intensive industries! She is now doubling her efforts in attracting foreign industrial and managerial expertise via Hong Kong to improve

The unique value of Hong Kong as a her industry and commerce.

neutral point of contact between East and West 'is therefore vital. In terms of communications, commerce and finance, Hong Kong is universally recognized as the economic centre for South East Asia. Hong Kong, as far as China is concerned, has certainly a role to play in her modernization for many more years to come, far beyond 1997, provided that free enter- prise tempered with social justice remains; and that we will not be crippled by the introduction of slothful work ethics. Hong Kong people are still making their living in the old fashioned way by working hard!

The leadership now in China composes of modest and practical

#dministrators.

They are certainly not new comers. After the fall of the Gang of Four, they merely re-emerged on the political scene. They know the shortcomings of China. They accept the fact that all ideas and actions based on keeping the door closed to the outside world and sticking to outmoded conventions are wrong.

In an open

door policy statement by Premier Zhao Ziyang which was reported in the December 1981 issue of Beijing Review, he said that in view of the lack of experience, China should master two skills; that of domestic economic management and that of foreign trade and economic exchange, He emphasized the need to modernize and expand existing industries [rather than to build many new factories? The importance of compensation

trade and of joint ventures were stressed. He further said that as China was no longer subjected to isolation, economic and trade contacts should be established with as many countries as possible through international

exchange on the bases of equality and mutual benefit.

7

China is in the group of low income countries and for that reason she is placing emphasis on short term measures to provide employment, to Improve living standards and to control inflation. There are many problems China must now face in industry. The obvious ones are backward technology, poor production design and lack of quality control. The ways to counteract these difficulties, are by the introduction of advanced technology from foreign countries, the improvement of inanagement and the introduction of incentive bonuses to encourage productivity and innovation.