CONFIDENTIAL
002173
MDHIAN 2596
SIZEABLE IMPACT ON THE BRITISH CONSTRUCTION. INDUSTRY, AND AN EFFECT ON THE BRITISH ECONOMY AS A WHOLE.
7.
A MAJOR DEVELOPMENT IN THE AREA IS THE HUGE AND RAPID ECONOMIC GROWTH TAKING PLACE ACROSS THE BORDER IN GUANGDONG PROVINCE. THE MOVEMENT OF HONG KONG FINANCED MANUFACTURING ACROSS THE BORDER HAS BECOME A FLOOD. SOME DESCRIBE GUANGDONG AS THE FASTEST GROWING INDUSTRIAL AREA IN THE WORLD AND THAT GROWTH IS NEARLY ALL FUELED AND FINANCED BY HONG KONG. THE GROWING ECONOMIC INTERDEPENDANCE HAS TO BE GOOD FOR HONG KONG'S FUTURE PROSPECTS.
8.
THE HONG KONG ECONOMY REMAINS SLUGGISH BY ITS OWN PREVIOUS HIGH STANDARDS. GROWTH, AT 3 PERCENT, ALTHOUGH HIGH ON A WORLD SCALE, IS LOW BY THE STANDARDS OF A FEW YEARS AGO. INFLATION, AT ABOUT 11 OR 12 PERCENT HAS FALLEN JUST A LITTLE OVER THE PAST MONTHS, BUT DOES NOT FLUCTUATE AS MUCH AS IT DOES IN MOST WESTERN COUNTRIES AND REMAINS AS STUBBONLY HIGH NOW AS IT HAS FOR TWO OR THREE YEARS AND THE HONG KONG GOVERNMENT HAS FEW WEAPONS IN ITS ARMOURY TO DEAL WITH IT (THE WEAPON NEARLY ALL BUSINESS AND FINANCIAL SECTOR LEADERS ADVOCATE, A DRAMATIC INCREASE IN IMPORTED LABOUR, IS SHUNNED BY THE HONG KONG GOVERNMENT).
9.
FOR ALL THAT THE ECONOMY SHOWS CONSIDERABLE BUOYANCY, IT HAS SKILLED AND HARD WORKING LABOUR FORCE, AND THE SKY LINE STILL CHANGES AT A SPEED THAT CAUSES EVEN THE REGULAR VISITORS STILL TO GASP. WE HAVE EVERY REASON TO CONTINUE TO PROMOTE BRITISH EXPORTS AS VIGOROUSLY AS WE CAN AND ABOVE ALL TO DO EVERYTHING IN OUR POWER TO ENSURE THAT BRITISH COMPANIES GET A GOOD SHARE OF THE COMING PROJECT BUSINESS. THE SHADOW OF 1997 IS BOUND TO GROW AS THAT DATE APPROACHES, BUT DESPITE COMMENTS SOMETIMES HEARD FROM THE HONG KONG GOVERNMENT THAT BRITISH BUSINESSMEN ARE MORE NEGATIVE ABOUT HONG KONG'S FUTURE THAN THOSE FROM ELSEWHERE, THE TYPICAL BRITISH FIRM HERE AND THAT INCLUDES MANY OF THE VERY
LARGE AND WELL ESTABLISHED ONES LIKE SWIRES OR THE HONG KONG AND SHANGHAI BANK, AS WELL AS THE NEW ONES, OFTEN IN THE FINANCIAL SECTOR OR RELATING, CONTINUE TO MAKE A GOOD PROFIT FROM THEIR BUSINESS IN HONG KONG AND CONTINUE TO MAKE A MAJOR CONTRIBUTION
TO HONG KONG'S SUCCESS.
HEAP
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