G. F. 323
CONFIDENTIAL #2
Chapter 1
OVERALL VIEW
機密
Background
Hong Kong's almost total dependence on imports and exports
dictates that developments in the economy are very largely a function
of developments in Hong Kong's overseas markets. Because world trade
is more volatile than domestic economic activity, Hong Kong's peaks and
troughs tend to be more marked than in those economies where Hong Kong's
exports are sold. This was seen during the recession when reductions in
employment and real wages were larger than elsewhere; and when world
economic activity recovered Hong Kong's recovery was also more marked.
In the latter half of 1975 and in 1976 the economies of Hong Kong's major
markets, in particular the United States and West Germany, were beginning
to recover from the recession. Expectations of rapidly strengthening
consumer demand, coupled with a run down of stocks of non-durable
consumer goods during the recession, brought about a large increase in
orders for these goods. This was one of the major factors that started
off the economic recovery in these two markets. The highly competitive
edge resulting from the sharp but shortlived recession in Hong Kong
ensured that a high proportion of this demand produced orders for Hong
Kong goods. This swing in the stock cycle represented a sudden increase
in demand that was small in comparison to domestic output in these
markets, but large in relation to Hong Kong's output.
The recovery
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The economic recovery in Hong Kong was therefore particularly
The performance in 1975 was better than expected, with an increase in the gross domestic product in real terms of 3% over 1974.
rapid.
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