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Labour productivity
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8.
A loss of confidence by entrepreneurs and members of the professionally and technically
qualified middle class in the future of Hong Kong would result in more of them trying to leave Hong Kong permanently. An outflow of people who are in a position to emigrate by definition, people with money or skills or both would become
pronounced. This brain drain would strike at the root of Hong Kong's external competitiveness in terms of trade in both goods and services, and is
no less, insidious than a serious outflow of capital. These people, with capital or managerial, professional and technical skills and experience, are hard to replace and their outflow would have
permanent adverse effects on the economy.
9.
The impact on the morale of people who can not emigrate, including members of the Civil Service, would be incalculable. This does not mean
that the work ethic would not remain or that they would not continue working, but it is likely that operating efficiency and labour productivity would decline (11)
Prognosis: the economy as a whole
10.
The situation described at the end of
paragraph 1 would be different from the gradual erosion of confidence experienced over the past 12 months. Depending on the extent
of the
loss of confidence, the situation could create an immediate and highly damaging impact on many sectors of the economy, and the damage to one sector would spill over into other sectors. For example, a run on deposit-taking institutions,
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