TNAG-2527-FCO40-3696-Hong-Kong-China-Relations-Committee-1992 — Page 148

24.

Some

CONFIDENTIAL

establishments

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consider that the MFN status would

have no effect on their OP business because the US is not the only

market of their products or there, is no difference in the

in the MFN or

non-MFN tariff rates for their products.

25.

affect their

are

In case loss of China's MFN status should

business, the contingency plans of the affected establishments

to explore new markets and to diversify their production base.

(i) Future investment intention'

26.

Most of the manufacturing establishments heavily engaged

in OP, which have production lines both in China and in Hong Kong,

will invest more in China instead of in Hong Kong. However, a few

will also invest in Hong Kong but will restrict their investment

in machinery and equipment involving the application of high

technology. On the other hand, some will invest in other countries

to diversify their production base.

B.

For manufacturing establishments engaged in little or no OP

(a) Reasons for not relying on OP or not engaged in any OP

27.

The reasons for not relying on OP or not even engaged in

any OP in China,

in China, though varying in nature, fall into one or more of the following categories:

CONFIDENTIAL