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latter may capture an increasing segment of Hong Kong's manufacturing base (paragraph 38).
14.
Given that Guangdong has a long-term advantage over Hong Kong in a wide range of manufacturing processes, Hong Kong's future lies in its exploiting those advantages that it has. These include natural advantages, like the harbour, and advantages it has developed, like its more skilled labour force, its experience in certain manufacturing industries, its experience in international trade, its accumulated financial and physical capital, and its position as a major regional financial centre. doing this Hong Kong will tend to revert to being a service centre for South China, especially Guangdong, but with the advantage that it is now much stronger
economically, has a well-developed indigenous
In
manufacturing base and has a financial services sector that has regional and international dimensions (paragraphs 39 and 40).
15.
This development scenario may lead to sectoral problems in Hong Kong, particularly for those industries using less skill-intensive and more land-intensive processes. In these industries, factories and production` processes are increasingly likely to be relocated across the border. One likely consequence would be that real wages in these industries would fall relative to those in the rest of the economy and part of the workforce would shift to the services sectors. Such adjustments are unlikely to be smooth but the sectoral problems caused can be limited if the pace of change is gradual (paragraphs 41
to 43).
G.F. 326
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