CODE 18-77
S$ 10/76
Mr Thompson (HKGD)
CONFIDENTIAL
HONG KONG : TWO HUNDRED LARGEST FIRMS
1.
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? ~ JAN 1978
SK OFFICER
PA M
PA
HEMISTRY
Action Taken
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The Monthly Survey of Employment, Payroll and Orders-on-hand extends until October 1977 and " ... covers some 200 largest companies." Apparently this was set up in 1974 when the Government feared a recession and realized they had no statistical indicator to tell them in which precise month a recession had begun. Consequently, a survey was constructed of "200 firms known to be large, such as Swire International and Jardine's." (Geoffrey Dart's phrase); its prime role being to detect when downturns in the economy and falls in wages occurred.
2.
The survey is not a statistically correct sample of 208 of Hong Kong's firms, neither is it (necessarily) Hong Kong's largest 208 firms. Consequently it should not really be used to infer anything about the recent structure of Hong Kong's economy its use is mainly to predict the direction.
But even there of change prevailing in the economy in the last two months. its use is limited. As an example one might suppose, looking at the figures, that employment in textiles had fallen in September and that this signified a drop in employment throughout the industry (because of, say, depressed markets in Europe): employment fell from 43.8 thousand in August to 42.1 thousand in September. But the number of firms in the survey dropped by one that month, and since it seems unlikely that one of Hong Kong's biggest firms went bust overnight one can only conclude that one firm ceased to return questionnaires that month.
3.
Since it is topical may I just add that employment in these textiles firms fell by roughly 51% from January to May, but has been roughly constant since (either there is a seasonal employment pattern or, as seems likely, there has been a cyclical downturn). Employment in that part of the clothing sector covered by these firms fell, rose, and fell again during 1977 .
13 January 1978
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CONFIDENTIAL
Mark Hull
Mark Hull
Economists Department