"
A SERIOUS CHALLENGE, IF SO WE WILL HAVE NO ALTERNATIVE BUT TO
EET IT IN OUR USUAL WAY - WITH REALISM, STABILITY, INGENUITY AND HARD WORK THOUGH IT IS IRONIC THAT THE E.E.C PROPOSALS DO NOT
APPEAR DESIGNED TO FAVOUR THESE VIRTUES IN OTHERS.
18.
WHATEVER THE OUTCOME OF THESE PARTICULAR NEGOTIATIONS, MUCH
WILL DEPEND ON THE GENERAL STATE OF WORLD ECONOMIC ACTIVITY AND
TRADE IN 1978, SINCE BUOYANT CONDITIONS COULD HELP US THROUGH WHAT MIGHT OTHERWISE BE A DIFFICULT PATCH. UNFORTUNATELY AT THIS TIME
CONDITIONS IN 1978 ARE PARTICULARLY DIFFICULT TO FORECAST. IT IS
STILL IMPOSSIBLE TO DISCERN SIGNS OF THE IMPROVEMENT IN CONFIDENCE
AND ACTIVITY IN THE AMERICAN AND EUROPEAN MARKETS WHICH WOULD BE
OF SUCH VALUE TO WORLD TRADE IN GENERAL AND HONG KONG IN PARTICULAR,
IN ADDITION TO SPECIAL FACTORS IN SOME COUNTRIES, FEAR OF INFLATION, UNEASILY BALANCED BY FEAR OF UNEMPLOYMENT, STILL INHIBITS
REFLATIONARY MEASURES. NEVERTHELESS DEMAND FOR ECONOMIC STIMULATION
IS BECOMING STRONGER, MORE GENERAL AND MORE AUTHORITATIVE AND MAY
WELL AFFECT POLICIES IN 1978. EVEN IF IT DOES NOT, WE CAN STILL
CONFIDENTLY EXPECT CONTINUING ECONOMIC GROWTH IN ALL OUR MAJOR
MARKETS IN 1978 OF ABOUT THE SAME ORDER AS IN 1977. GROWTH IN THE
UNITED STATES AT ABOUT 4.5 5 PERCENT MAY BE A LITTLE BELOW THIS
YEAR'S FIGURE, THAT IN THE U.K AT 2 3 PERCENT A LITTLE ABOVE IT, AND IN GERMANY AT 4 5 PERCENT ABOUT THE SAME, IT IS ALSO TRUE THAT A FAIRLY OPTIMISTIC VIEW IS TAKEN OF THE GROWTH OF WORLD TRADE IN 1978, WHICH IS EXPECTED TO INCREASE BY 8 PERCENT AS AGAINST 6 PERCENT IN 1977.
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19. TAKING ALL THESE FACTORS TOGETHER ONE MIGHT SAY THAT PROSPECTS
WERE REASONABLY GOOD BUT NOT BRILLIANT, BUT WOULD IN THE SHORT TERM BE SIGNIFICANTLY IMPROVED BY ANY EARLY AND EFFECTIVE STEPS TO STIMULATE THE MAJOR ECONOMIES,
26.
TURNING TO OUR OWN TRADING FORTUNES, THESE SHOULD BE FAVOURED BY THE FALLING LEVEL OF STOCKS EXPECTED IN GERMANY AND THE PROSPECT
OF INCREASED CONSUMPTION IN THE U.K. MOREOVER OUR EXPORT PRICES IN
HONG KONG DOLLARS HAVE REMAINED STABLE SINCE THE MIDDLE OF 1976:
ALTHOUGH THERE WAS SOME APPRECIATION OF THE H.K DOLLAR IN THE SECOND
HALF OF 1976 AND EARLY 1977, IT HAS DEPRECIATED IN THE LAST FEW
MONTHS. SO WITH WORLD EXPORT PRICES INCREASING AT ABOUT 3 - 9 PERCENT A YEAR OUR COMPETITIVE POSITION IS BEING GRADUAALLY
REGAINED. GIVEN THE COMPARATIVELY OPTIMISTIC FORECASTS FOR WORLD
whe
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/ TRADE IN 1978,