TNAG-2293-FCO40-3305-Official-visits-from-Hong-Kong-to-China-1991 — Page 200

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a

up outward

initiatives taken to attract foreign investment,

lot of Hong Kong manufacturers set

processing and compensation business along the

costal areas of China in order to lower production

costs and to enhance the competitiveness of their

products. In particular being faced with the two

major problems

problems of shortage of labour supply and

inflation in recent years, Hong Kong manufacturers

continuously shift their production processes to

The scale of production of Hong

the

mainland.

Kong enterprises in China is getting closer to

that adopted in domestic production in Hong Kong.

This has resulted in structural changes in Hong

Kong's export trade, ie. exports previously

produced in Hong Kong have now become exports of

products made in mainland China. This situation

is reflected in the Hong Kong statistics as a

slight fall or small increase in Hong Kong

exported products while Chinese re-exports through

rise. Hong Kong

The transfer of Hong Kong s

industries to the

mainland is another reason for

the rapid expansion in entrepot trade mentioned

above.

(iv) The supply of fresh, live and frozen products from

the

mainland to Hong Kong has played an important

part in trade between the two places.