CONFILE TIAL
11. Employment. Both the number of people unemployed and the unemployment rate fell drastically last year, as this table shows (you may actually hear the results of the September 1977 survey).
Date of labour force survey:
Sept 75
Mar 76
Sept 76
Mar 77
No. of unemployed
(thousands)
186
110
88
86
Size of labour force
(thousands)
1,986
1,947
1,918
1,926
Unemployment rate (%)
9.4
5.6
4.5
4.6
The economy was in March felt to be working at full employment (Hong Kong has a surprisingly high level of frictional unemployment given the absence of unemployment benefits). Although employment in most manufacturing sectors had fallen there were still many unfilled manufacturing vacancies as many semi-skilled women left between September 1976 and March this year (due to the rise in real wages of their husbunds) and there are sufficient unskilled workers to replace them. Employment in March 1977 was up in restaurants and cafés % on March 1976, and in construction sites (32%) and banks (6%) but only 2% up in wholesale, retail, import and export industries owing to the sluggishness of world trade.
12. Nominal and real wages. These rose - see attached graphs.
13. Summary. This briefing is longer than I hoped it would . bc, but in view of the need to get a dialogue going between London and Hon; Kon; on the state of the economy I feel it is important for you to be able to ask questions so as to restart the dialogue, following Adrian Smith's letter to the Financial Secretary of 2 August and the dusty, not to say rudely negative, reply sent by the Acting Financial Secretary. Many of these questions do not bear on the immediate state of the economy, but rather on matters of economic information or its absence and on
Government policy formation. "ence the length. Overall, as you know, the domestic side of the economy is booming while the foreign side has recovered from 1974 but its future is not fantastic owing to growing world protectionism.
10 October 1977
-5-
Mark Hull
Economists Department 233-1:106
CONFIDENTIAL