G.F. 326
28.
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(a) Production
18
The present level of development of Guangdong's industrial sector is significantly lower than that of Hong Kong's. Therefore despite having the advantage of catching up, it is unlikely to be able to move quickly to the level of technology currently employed in Hong Kong. The majority of the factories seem to be still using labour-intensive production processes. The machinery in. some factories is no longer used or is being phased out in Hong Kong. Management and quality control techniques are rudimentary. Infrastructural facilities generally, and power supply and transport facilities in particular, are inadequate. Trained manpower and managerial staff are in short supply. Industrial support services which includes technical or managerial support aiming at productivity enhancement, quality improvement and product design innovation remain weak and uncoordinated.
29.
(b) Marketing
Guangdong's degree of dependence on Hong Kong in respect of marketing is even greater than for production. The Guangdong authorities and enterprises are seriously deficient in international trading experience and knowledge. They, therefore, have to rely on their Hong Kong partners to supply the latest information about economic conditions and product trends in the overseas
markets.
30.
In respect of physical infrastructure like international port facilities (including container port and airport) and institutional infrastructure like financial and related business services which are considered highly advantageous to the development of international trade, Guangdong has no choice but to continue to depend on Hong Kong as at present. likely to be the case for a long time to come.
This is
CONFIDENTIAL #
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