CONFIDENTIAL #
from Hong Kong.
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The creation of manufacturing jobs in
Guangdong is seen as, in effect, exporting jobs and thus reducing job opportunities in Hong Kong (paragraph 31).
12.
32).
From a short-term perspective such fears seem misplaced. Investment spending in Hong Kong in 1986 and 1987 was at an all-time high and was growing rapidly. There appeared to have been a considerable effort to install new labour-saving machinery in Hong Kong as an alternative to moving production into Guangdong (paragraph
Overall unemployment in Hong Kong has been low in the last few years and job vacancies have remained high with substantial increases in wage rates being recorded even in those industries which have become heavily involved in outward-processing, suggesting that they were pushed into Guangdong by labour shortages in Hong Kong, rather than pulled in by Guangdong being inherently more attractive as a manufacturing base (paragraph 33). However, in some occupations, particularly unskilled occupations, wage rates may have increased less quickly than they otherwise would have, because employers have had the option of employing cheaper labour in Guangdong. this respect outward processing and similar activities in Guangdong are equivalent to allowing the importation of labour into Hong Kong (paragraph 34).
13.
(b) Long term future
In
On present trends, a plausible development scenario in the long term future is that Guangdong will concentrate on agricultural and industrial development while Hong Kong will become more specialized in services. A greater degree of economic interaction and integration between the two places can be expected (paragraph 37). the course of time, Hong Kong has the potential to become the "financial/commercial capital" of Guangdong while the
In
CONFIDENTIAL #3
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