TNAG-2791-FCO40-4030-Relations-between-Hong-Kong-and-China.-With-maps-1993 — Page 40

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(IV) Investment

31.

(a) Hong Kong's investment in China

Industrial processing was still the mainstream of Hong Kong's investment in China. There was, however, a new trend in that some Hong Kong companies were relocating part of their support services to China, also to take advantage

of the lower labour and land costs there. These included

Juko Electronics, Kaifa Technology (HK) and Wisetronics in the manufacturing sector, which had moved part of their research and development activities or warehouse facilities across the border, as well as Giordano, which had moved

some of its book-keeping operations to the mainland. A few

companies in the service sector were also planning to relocate part of their support operations to China. Such relocations accorded with China's stated objective of promoting the development of its tertiary service sector. For instance, in September 1992 Cathay Pacific Airlines

initiated staff recruitment for its revenue accounting and

information processing centre in Guangzhou.

The new

company, Guangzhou Guo Tai Information Processing Co Ltd,

was scheduled to commence operation in the early part of 1993. In the initial stage 170 staff would be employed in

China. The number would eventually rise to 250.

32.

In October 1992, Hong Kong Telecommunications

signed an agreement with the Guangdong Posts and Telecommunications Administrative Bureau, under which Hong Kong companies applying for international private lease circuits between Hong Kong and Guangdong could deal directly with Hong Kong Telecommunications without having to negotiate with the Guangdong Bureau. With this

improvement

inconvenience

their support

in

cross-border

communications,

the

faced by Hong Kong companies in relocating

operations

Guangdong would be greatly

to

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