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(G) MFA and bilaterals
It was noted that the EEC would wish to start bilater
negotiations with Hong Kong in March and that
these would be the first in the series. This
situation had happened in the past and discussion followed as to whether any benefits would accrue from UK arguing for the Hong Kong negotiations
to take place at a later date. DTIC suggested
that little would be achieved. He further commented
that Hong Kong industry was very sensitive to the EEC's mandate for a 10% reduction in exports by
dominant suppliers.
(H)
Economy
The FS outlined Hong Kong's economic position
over the past two years and its prospects for
1982. GDP had risen 10% per annum in real terms
during the past two years and it had more than
doubled over the past six years.
Prospects for
1982 were very much dependent on the American
economy and the general view was that conditions
would remain doubtful for the first six months
but would pick up over the last six months.
Despite an expected budget surplus Hong Kong's
major economic ill lay in inflation and its
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