TNAG-2527-FCO40-3696-Hong-Kong-China-Relations-Committee-1992 — Page 149

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CONFIDENTIAL

10

lack of confidence

in the quality of

products

manufactured in China

backward infrastructure in China, e.g. unstable

electricity supply

products under quota control or restrained

certificate of origin requirements

by

e.g. textile

products

a

low labour

products associated with

cost as a

percentage of total production cost, e.g. computers

for which materials cost over 80% of the total

production cost

lack of logistics support in China for high-tech

products

products restrained by COCOM (Coordination Committee for Multilateral Export Controls) cannot be exported to China for processing.

(b) Means of maintaining price competitiveness

28.

or

even no

ор

For manufacturing establishments . engaged in little

Op in China, moving up-market and going more

automated/mechanized are their means of maintaining price competitiveness of their products. According to most of them, competition among Hong Kong companies is only keen in low end products. In addition, automation and mechanization of the

manufacturing processes can reduce their reliance on labour.

CONFIDENTIAL