BRIEF 8
However, subsequent overheating of the economy is causing some
concern and the Government has taken measures to reduce demand.
PROSPECTS
4
The Governor has indicated that the short-term outlook
is reasonably optimistic, despite an expected slowing-down
in economic growth of Hong Kong's major markets in 1980 and in the
volume of world trade in manufactured goods.
5
Prospects for economic growth in the medium term appear to
be good, although the growth rate is unlikely to exceed the past
long term rate of about 9% per annum. The overall economic
situation has perhaps become potentially more volatile than in
the past due to erratic behaviour of money supply, the increased
role of the construction industry, and the property sector generally
and large scale immigration from China. The constraining factors
may be:-
1
Rising production costs, reflecting shortages of labour
and land, that will tend to weaken the international
competitiveness of Hong Kong's industries which are facing
increasing pressure from low-cost suppliers such as Korea
and Taiwan. As a result, Hong Kong is seeking to trade up
in quality and to invest in more capital and skill intensive
industries with higher added value.
Vulnerability to external factors, such as changes in trading
policies and market conditions of major trading partners,
because the economy relies on only a few manufacturing
industries, chiefly clothing and textiles. Fear of
protectionism has intensified the need to diversify and
broaden the industrial base. Despite endless worries about