TNAG-1630-FCO40-2246-Visits-by-Hong-Kong-Government-officials-to-China--the-UK-an-1987 — Page 84

63

7.1.3

Regarding

extent

HK

of

is likely to

industries, the Chinese authorities will

continue to develop processing trade, compensation trade

end joint venture arrangements, as 2 means to introduce

technology and management skills. The

businessmen's involvement in these areas

increase further. The lower labour and land costs in

China have attracted the setting up of labour-intensive

and/or land-intensive processes, which are costly in

Hong Kong. Such processing arrangements were believed to have grown rapidly ever the past year and helped to

increase the flexibility of HK's manufacturing sector in

coping with the substantial increase in overseAS

orders. The expansior of processing arrangements has so

far

mutually beneficial, providing many job

opportunities in China particularly Guangdong and

been

Shenzhen.

7.1.4

Inadequate power supply continues to be a problem for

Guangdong. The expansion in industrial and commercial

activities, together with increased household affluence,

and the resultant strong demand on the transport system,

have placed heavy pressure on the power supply. Although there are firm plans to increase significantly

the generation capacity and the situation is expected to

improve somewhat, power supply will probably remain a

corstraint to development for some time.

7.1.5 Ir. some areas power supply is still provided on a

rotational basis, and thus limits the operating hours of

factories even though there cre sufficier.t orders.

Offices and hotels (some with their own generators) are

also heavy users of electricity, With the substantial

increase in household incomes in recent years, there is

also growing espiration among households for higher

living standards, including ecquiring more household

appliances. A continued strong growth in demand for

electricity is expected.