[/SI
Mr JAB Stewart
RE
CONFIDENTIAL
1616/1
HKK 121616 RETAVIO A REGATRY NO. 51
27 SFF 1988
REDSTRY
Action Tuken
194
Flag
Flag
*
HONG KONG AND THE MULTI-FIBRE AGREEME
ماه
1. You asked for further thoughts on the question of the effect on the growth of Hong Kong's GDF if the Commission's proposals as envisaged were to be approved.
2. The memorandum attached to the Governor's letter of 3 September suggested that the effect would be a cut in the growth rate of the order of 1.5 percentage points. It explained that in the Hong Kong Government's view the prop- osals if accepted would reduce the growth in exports by 1.5 percentage points and that since Hong Kong's GDP is roughly equal to its exports they would have the same effect on the growth of GDP.
3. This view was disputed by this department (paragraph 6 of the attachment to Mr Milton's submission of 8 September). Our argument was that based on 1976 figures, Hong Kong's domestic exports are only 70% of GDP. As a result we stated that the effect on the growth of GDP would be a reduction of 0.77 percentage points rather than 1.5 percentage points. However, I would suggest that if one accepts the 1976 proportion as 70% (or more accurately 69%) thus the true effect would be a reduction in the growth of GDP of 69% of 1.5 percentage points, ie 1.04 percentage points.
4.
the
However, the truer picture can be gained by considering the average proportion of exports to GDP over the ten years 1988 to 1976. This gives a figure of 63.8% and a reduction
0.96 percentage points.
5. I have discussed `this minute with Mr Hull of the Economists Department who is in agreement with it.
27 September 1977
تھا
J Thompson
Hong Kong & General Dept
* Those & assumptions are based on
am
figures, a summary
Hang tai gi I thich is attached,