1976
Summary of DTIC_Industrial Investment Promotion Activities 1976-81
Ancor toxicke
Appendix I
No. of indu-
No. of Outward Missiona
strial or
No. of
seminars
technology
No. of Inwerd Missions
No. of conseq
No. of such
quent enquiri companies
es handled
transfer
(overseas &
fairs attend local)
Europe
USA Australia Japan
Total
ed
which com-
menced manu- facturing
operation in Hồng Kong
ام
1
1
1
0
3
1977
2
اسم
1
0
O
3
1
210
11
1
206
14
1978
2
2
о
2
6
1
1979
2
3
2
1
8
4
1980
3
3
1
2
9
O
a
2
225
5
3
615
12
10
701
5
1981
1
2
الاسم
(Jan-June)
1
1
5
1
3
6
391
Ly
Source: records of the Department of Industry
MIK
09011
PA
6
Pascola
Mr. Edgar
over
fum brighy
deft for Mr. Athing
HONG KONG ECONOMY: PROBLEMS AND PROSPECTS
18/2
1 Hong Kong's economic performance has been outstanding in recent years. Real GDP grew by 10% in 1980, the 5th year running at or near this rate, and per capita income has risen by more
than a half during this period despite a massive influx of
immigrants which has helped to increase the labour force at
around 8% in each of the last two years. These achievements
have been all the more notable in view of the restrictions
placed abroad on imports of Hong Kong's main product, textiles, and demonstrate the economy's exceptional resilience and ability
to adapt.
2
Nevertheless, several developments this year suggest that
Hong Kong is going through a difficult patch:
3
1
the trade deficit has widened, to HK$12bn (£1.1m) in
the first 7 months of 1981, from HK$8.3bn in the same
period last year
growth in exports has slowed down, and may be inhibited
further by developments in Hong Kong's main market,
the US
-
the inflation rate around 15% pa
rising a little
appears to be
the value of the HK$ has fallen by some 17% this year
interest rates are at record levels
the Hong Kong stock market has fallen some 200 points
from its record level of 1700 2 months ago
money and credit are growing rapidly.
These developments are, of course, closely interrelated. The
decline in the HK$ is probably the result not only of the larger
trade deficit, but also to the fact that Hong Kong's interest rates
were not raised as sharply as US rates, and are still scarcely
positive in real terms. Moreover, the decline against the US$ largely paralleled the decline in other currencies; only in the last month has the HK$ weakened slightly against other currencies also.
Interest rates have evidently been insufficiently high to deter
the rapid growth in credit, which has helped to finance a property
/and
-2-
and stock market boom. The recent weakness in the stock market
so far represents no more than a correction, and has been exacerbated by a heavy programme of rights issues and disappointment at the failure of US interest rates to fall. The decline in the rate has also exacerbated inflation, but
should help Hong Kong's export industries to remain competitive.
4 It is always dangerous to make predictions about Hong Kong's highly volatire economy, but it would be premature to foresee a collapse in the HK$ or in domestic activities. Nevertheless, it may be necessary for the vans to aim to tighten domestic credit conditions somewhat, with some adverse impact on domestic
activity and employment.
21 September 1981
SH Broadbent
ESID