benefit from this proximity in the future. Access to finance and technology can be supplied from Hong Kong. The upgrading of the province's industry in response to the upgraded needs of Hong Kong industry will be an opportunity for much future growth. Guangdong will also be able to use the expertise and investment available from Hong Kong to increase local value - added.
Domestic Markets
2.95 The province is now well placed to become a major supplier of light industrial manufactured goods to the rest of China. There is a clear demand for these goods and the province has a "head start" over other regions in China.
2.6 Threats to Further Development
General
2.96 The main threat to continued development is competition from other regions of China (particulary the Yangste Basin) and other countries (particularly Vietnam - much depends on whether or not the US lifts its embargo on trade and investment in this country). Developments in Hong Kong - which will still be an "external economy" may also be a threat.
2.97
Other threats concern the continuation of preferential bi-lateral trade agreements such as the US "Most Favoured Nation" status.
Competition from Other Countries and Other Parts Of China
2.98 Competition from other newly industrialising
nations in the region is now a very serious threat. The success of the Chinese model of economic regeneration is now well known. Countries such as Vietnam, India and Bangladesh are clearly trying to emulate it. These countries have workforces with similar levels of education to Guangdong and a similar attitude to work. There is a danger that these countries will upgrade the education and skill levels of their workers faster than Guangdong. Foreign investors are now seeing which country can give them the best deal.
2.99
The Consultants consider that the newly industrialised economies such as Thailand, Indonesia and the Phillipines are also a threat - but in a different direction. Labour and sometimes land costs in these countries are much higher than in Guangdong but they are still likely to be the areas that are in competition for the higher-tech/higher value-added industry the province wishes to attract.
2.100 Competition from other regions in China must also be seen as a threat. High wages in one part of a country often leads manufacturers to consider relocating their businesses. High wage regions need to have significant other advantages (as indeed Guangdong does appear to have) to overcome a problem like this. There is also the danger that these provinces will continue to maintain higher levels of education and will upgrade their infrastructure in a more co-ordinated and effective manner than is happening in Guangdong.
2.101 Other regions or countries will, however, only pose a major threat if Guangdong fails to resolve its current problems. With 60 million people it provides a huge market in its own right. Developments in
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New road and rail bridge over Dongjiang
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