TNAG-1621-FCO40-2235-Relations-between-Hong-Kong-and-China-1987 — Page 89

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assurance in the Joint Declaration about the maintenance

of the stability and prosperity of Hong Kong and the fact that the achievement of these objectives is in China's interests, there should be no undue worries on this

account.

57.

(c) China as an investor in Hong Kong

In the next ten to fifteen years, China's role as an investor in Hong Kong is likely to become more prominent, both in absolute and in relative terms.

Moreover, by then China's investment is likely to have diversified into practically every economic sector in Hong Kong, thereby enabling China to enjoy a share in the

general growth and development of the Hong Kong economy.

Free convertibility of the Hong Kong dollar means that

there will be no impediment to the remittance of foreign

exchange earnings.

58.

Besides making profits and earning foreign

exchange, China's investment in Hong Kong has other economic advantages. First, it provides good exposure for Chinese enterprises and their staff, particularly as regards acquiring the knowledge and skills needed for

successful international trading. Second, through

investing in real estate development and in hotel

operations, Chinese enterprises can acquire up-to-date property development and hotel management know-how.

Third, investing in Hong Kong's manufacturing industries

can be a means of facilitating China's modernization

drive, through the transfer of technology and production

skills into China. As long as these advantages are still

available, it is likely that China will continue to invest

in Hong Kong. All these factors imply that China's

G.F. 326

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