MORE Hong Kong manufacturers will become increasingly reliant on the abundant supply of scientists and engineers in China to carry out their research, according to chairman of the Productivity Council, James Tien. Speaking at a Hong Kong Federation of Industries luncheon yesterday, Mr Tien said Hong Kong's development potential would be constrained by its limited supply of skilled labour. Other constraints included insufficient investment in research and development (R&D) and a stagnant market in the West, he said. However, these constraints might be partly removed if technological and economic co-operation with China continued to grow. ''There is a vast pool of scientists and engineers engaged in R&D in China and they form a powerful resource on which we can draw upon.'' said Mr Tien. He cited software development in China as an example, saying that there were already many successful joint ventures that capitalised on local software programmers and engineers. Mr Tien said Hong Kong and southern China were now about to enter a new stage of complementing each other. ''While the first stage involved the use of China's cheaper land and labour resources, the second stage will create momentum through the use of China's intellectual resources and the access to China's rapidly expanding market,'' he added. Mr Tien also said the recent depreciation of the yuan did not seriously hurt Hong Kong manufacturers who had plants on the mainland. Many Japanese component suppliers absorbed part of the exchange rate fluctuation to avoid a sudden surge in prices. ''Thus the competitiveness of Hong Kong manufacturers will not be seriously affected,'' he said.