a leap of 29% in the value of imports in 1976 to match the 42%

increase in exports in the same year. With the exception of 1977

even more impressive gains were recorded in the following years;

in 1981 (January- August) the rate is still running in excess of

26%.

and

It is important to note the re-emergence of re-exports as a

significant factor in Hong Kong's international trade since the

trade resurgence of Hong Kong's entrepôt/with China in 1979. With

1+

re-exports now accounting for as much as 30% of total exports, our

performance must be measured against the 70% of total imports

which are retained in Hong Kong (see table with para 5(ii).

Hong Kong's economy remains more than usually dependent on the

world economic climate especially as its clothing and textile exports,

which still account for well over 40% of its exports, are vulnerable

to import restrictions imposed by its trading partners (i.e. the

United States and the EEC which together take over 70% of total

exports). The current renegotiation of the Multi-Fibre Arrangement

(MFA) is being conducted with great apprehension by Hong Kong

Government officials and local industry is monitoring the UK

attitude closely.

To counter quota restrictions in its major markets and

competition from low-cost suppliers such as Taiwan and Korea, Hong

Kong needs to trade up-market and to expand and diversify its

industrial base away from reliance on textiles and clothing. Hong Kong will vigorously resist calls for restriction on exports

in its new growth area of electronics (e.g. TV receivers) but the

increasing accent on quality should create an increasing demand for

more sophisticated capital and testing equipment.

Apart/.....

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