CONFIDENTIAL
HONG KONG
102. Exports are estimated to have risen by 13% (about half of which is attributable to volume) in 1972 despite the restrictive measures adopted by the USA and the UK towards Hong Kong textile exports. In 1973 and 1974 rather slower growth in volume is forecast, as the effects of the textile restrictions become more apparent. Value increases of 12% and 8%, respectively are forecast (with a sharp price increase in 1973).
103. Imports, which were stagnant in the first half of 1972 recovered in value terms in the second half of the year and a 91% increase is estimated for 1972 as a whole; volume growth, however, appears to have been negligible. In 1973 and 1974 some volume growth is forecast, though the 13% rise in value in 1973 is again largely attributable to prices.
104. Net invisible receipts are forecast to rise much faster in 1973 and 1974, with receipts from tourism more than offsetting higher freight and insurance payments. The inflow of private long and short term capital which rose sharply during 1971 and the first half of 1972 (also reflected in the balancing item) appears to have abated in the second half of 1972. A slower rate of increase in reserves is forecast for 1973 and 1974 as the capital inflow eases.
CONFIDENTIAL
35