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low in the last few years and job vacancies have remained high 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.
34.
Further, overall employment in manufacturing has changed little in recent years and manufacturing wages have risen quite substantially; again suggesting little diversion of jobs to China over this period. However, it
is possible that, in some occupations, particularly unskilled occupations, wage rates have increased less quickly than they otherwise would have, because employers have had the option of employing cheaper labour in Guangdong. In this respect outward processing and similar activities in Guangdong are equivalent to allowing the importation of labour into Hong Kong except that the jobs move to the labour rather than the labour to the jobs. Among the advantages of the jobs moving are that the potential strain on Hong Kong's social infrastructure and the security problems that would be associated with the importation of labour are avoided.
35.
Admittedly, this favourable outcome for both Guangdong and Hong Kong of the development of outward processing in particular and of investment in general has been achieved against a background of strong economic growth. The question, therefore, arises of whether one can be as optimistic about the longer-term implications of this development for Hong Kong.
36.
As discussed earlier, the present supporting role of Guangdong to Hong Kong is likely to continue, at least in the short to medium term future (paragraphs 26 to 30). The adoption of the Coastal Region Economic
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