ern China, and I believe that in the future this area could turn
into the production centre of Asia, thereby utilizing the abun-
dant workforce in the area.
The prospect of a South
South China Economic Area has already
attracted substantial numbers of foreign enterprises keen on
capital investment. The direct investments in Hong Kong made by
Japan, as well as by western nations, have promoted Hong Kong's industrialization in terms of advances in capital, technology and management. The major attractions of Hong Kong for foreign inves- tors lie in its human resources, information and communications
infrastructure, and its financial institutions. The existence of
neighbouring South China with its abundant labour force also helps to provide further incentive for foreign investment. Ac- cording to a Hong Kong Government survey, 37.2% of the foreign firms who have invested in Hong Kong, have commissioned produc- tion arrangements with manufacturers in China, and many of the foreign firms who invest in Hong Kong look to take advantage of this set-up when they begin operations in the Territory.
Japan has consistently supported China's modernization,
based on the belief that China's economic development is a major factor in the continued peace and prosperity of Hong Kong and the Asia-Pacific Region as a whole. Based on this policy, Japan has
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