INCHCAPE Pacific chairman Paul Cheng Ming-fun has called on the Government to ensure that Hongkong becomes ''China's own Silicon Valley''. ''We have the talent, we have the people, and if the Government provides more funding in this direction, this can happen,'' he told a British Chamber of Commerce meeting. Although agreeing that Hongkong companies were hardly world-famous for research and development, he said a few examples proved that could be changed, and pinpointed electronics as a sector where the territory could make an impact. ''Not so much in basic research - we should leave that to the US, Germany and Japan,'' he said. ''In applied research, particularly product development and product refinement, Hongkong can certainly play a role.'' One of the most recent major investments in technology was the building of the University of Science and Technology, which became mired in controversy when it went massively over budget. Mr Cheng said this issue had been ''overblown'', and that in a decade's time the arguments about funding would be forgotten and it would be viewed as a wise investment. The territory's ''voluntary tax system'' - the Jockey Club - could fund further development. He brushed aside worries that civil unrest in China, such as the riot in Sichuan province in which 10,000 people are believed to have participated, showed the country was heading for a crisis similar to that of 1988 and 1989. He said the regime in Beijing had watched the problems in the former Soviet Union, and was learning from them, and income disparities were not as great as they had been. ''The problem is a matter of degree. A lot of people have been able to satisfy their appetite for material things they have not been able to purchase for 30 years.'' The Chinese economy had always had cycles of fast growth followed by setbacks, partly because of its huge size, he said.