TNAG-2188-FCO40-3125-Hong-Kong-nationality-package-1990 — Page 88

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if the growth rate of investment slowed down, the outcome

would be unclear. The Report therefore fully

acknowledges the importance of investment. Employment

and capital investment are shown combined in a production

model to assess the economic implications of emigration.

The production model derives the relation between the

availability of skilled labour, the level of capital

investment and the GDP. Six separate scenarios, with

varying levels of emigration and skilled staff, have been

developed. The impact of the different scenarios on the

projection of Hong Kong GDP for each of the years between

now and 1997 is shown in Figure 7 (Page 27 of the

Report).

Figure 7 shows that, if emigration were to return to its

pre-1987 level (5,000 skilled staff leaving annually) and

investment were to keep growing at its historical rate of 9.75 percent per year, the per capita GDP would increase

in real terms by 7 percent.

Hong Kong currently has 315,000 PTMAS. On historical

trends, the annual growth rate of PTMAS is 7.1%. ΤΟ

maintain existing GDP rates, between now and 1997, they

too need to stay in Hong Kong.

If nothing is done to stabilise emigration amongst PTMAS,

there could be a rapid deterioration in the growth of the

Hong Kong economy. In the worst case, under scenario C,

the GDP could be as much as 45% less in 1997 than if

historical growth rates were to continue.