TNAG-2527-FCO40-3696-Hong-Kong-China-Relations-Committee-1992 — Page 142

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3

In

management level of the firms visited. As a result, only a

only a limited

number of visits

of visits could be

could be conducted. No quantitative analysis is therefore suggested to be made of the results of the visits.

this paper, the mention of the number of companies having a particular view on a certain topic serves no more than to give a rough indication

of how views are divided among

among those interviewed, and should not be interpreted as reflecting representatively the proportionate split of views in the industry/trade concerned.

II.

Major Findings

A.

For manufacturing establishments and trading firms heavily engaged in OP business

(a) Reasons for OP

7.

Nearly all the manufacturing establishments and trading

firms heavily engaged in OP business quote that the major incentive for OP in China is the low production cost there as

compared to Hong Kong. The labour and land costs are only a fraction of those in Hong Kong. For instance, the wage in China is around RMB 300-500 per month. Thus, their products produced

through OP in China can be more price competitive. Abundant

labour supply in China, in contrast with the chronic shortage

of manufacturing labour in Hong Kong, is another major reason

for OP.

A few companies also mention that through engaging in OP business they could further explore the China market.

8.

(b) Practices of manufacturing establishments

9.

Types of ОР contract

Manufacturing establishments

engaged in OP activities in China may sign one or more, or a

combination of the following types ОР contracts business counterparts in China

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with their