NFIDENTIAL: OK BYES A
after that in the Monthly Digest of Statistics.
9. Balance of Payments Statistics.
Trade figures
for merchandise have always been excellently covered, but this year
it is planned "to conduct statistical surveys with a view to improving estimates for the import and export of services
No mention is yet made of recording capital flows; the World Bank team noted that
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published information on banking activities has declined since 1974, when the Sterling Exchange Area ended.
10.
Components of Visible Trade.
Attached are Graphs 3 and 4 which show the major components of Hong Kong's domestic exports and imports since 1973. Clothing exports may be declining, but they are still a greater proportion than in the early 1970's. Watches and clocks are growing markets. On the imports side things seem fairly quiet.
SHORT RUN POLICIES
11.
Budget Guidelines, Ratio of General Revenue a/c Reserves to contingent liabilities, the fifth and sixth strategic rules 'underlying budgetary policy. Abolish.
POLICIES IN THE MEDIUM TERM AND LONGER
12. Export quotas. Hong Kong faces export quotas in a number of its textile markets the EEC, USA, Australia, Austria, Canada, Finland and Switzerland, for instance. These are usually left to HKG to administer and their system is basically to award them in the same proportions as the previous year, unless a firm fails aver two years to fulfill 50% of its quota. Otherwise, firms with excess quotas may sell these to expanding firms requiring more quotas. The old firms reap a windfall gain which could be largely removed if HKG allocated quotas in proportion to a firm's previous year's actual shipments. A better system
/still
CONFIDENTIAL; UK WING A