G.F. 326
CONFIDENTIAL #B
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local economy for occupations requiring a higher level of knowledge, training and skill.
12.
(iv) China as an investor
Apart from the acquisition of a controlling interest in Conic Investment Ltd. by the PRC-controlled Sin King Enterprises Co. Ltd. in 1984, China has not until recently been particularly active in investing in Hong Kong's manufacturing sector. China is apparently mainly
interested in investing in those industries which involve
a relatively high level of technology, so as to facilitate
technology transfer into China, although access to overseas markets and exposure to modern business techniques are also relevant factors. As Hong Kong's manufacturing sector comprises mainly industries producing light consumer goods, the scope for transferring of
advanced technology is generally not large.
13.
Exports through Hong Kong to China embodying technology transfer have to be compatible with the COCOM
restrictions. Given the types of technology currently
being transferred to China and the strict controls over the export of strategic commodities, the risk of COCOM-restricted technology being diverted through Hong
Kong to China seems to be low.
14.
(v) China as a competitor
The manufacturing industries in the Special
Economic Zones and the Open Cities in southern China have placed more emphasis on exports in recent years, but still have a long way to go before they can be regarded as
externally oriented. However, even now they may compete with Hong Kong in two ways, firstly, in overseas markets
and secondly, for investment.
CONFIDENTIAL ##
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