CONFIDENTIAL
COMPETITIVENESS OF THE HONG KONG MANUFACTURING OUTPUT IN THE
LONGER TERM ·
933 - 1
10. THE HONG KONG STOCK MARKETS TOO HAVE PERFORMED WELL. THE
HANG SENG INDEX ROSE 26 PER CENT IN JANUARY CLOSING LESS THAN
A POINT BELOW THE 1983 PEAK. OPTIMISM WAS WIDELY SPREAD AND
WAS HELPED BY THREE SEPARATE CUTS IN INTEREST RATES. OVERSEAS
INTEREST INCREASED AND CHINA'S ACTIVE THOUGH MODEST PARTICI-
PATION IN THE PROPERTY MARKET AND THE INDUSTRIAL SECTOR WAS WIDELY
INTERPRETED RIGHTLY OR WRONGLY AS SIGNALLING A COMMITMENT TO
MAINTAIN THE PRESENT POLITICAL AND ECONOMIC STRUCTURE.
11. THE PROPERTY MARKET REMAINS GENERALLY DULL THOUGH THERE
HAS BEEN SOME INCREASE IN DEMAND FOR COMMERCIAL AND INDUSTRIAL
PROPERTY. A PRIME DEVELOPMENT SITE (ADMIRALTY 2) WAS SOLD AT
AUCTION ON 15 FEBRUARY FOR HK DOLLARS 380 MILLION. WHILST THIS
WAS SUBSTANTIALLY LESS THAN IT WOULD HAVE FETCHED TWO YEARS
AGO IT NONETHELESS GAVE THE LIE TO THOSE PESSIMISTS WHO
THOUGHT THAT THE BOTTOM HAD FALLEN OUT OF THE PROPERTY MARKET
ALTOGETHER PARTICULARLY AS THE PURCHASERS WILL NEED TO SPEND
CONSIDERABLY MORE THAN DOLLARS ONE BILLION ON THE SUPERSTRUCTURE.
AT THE SAME TIME THE SALE PRICE AND THE NUMBER OF BIDDERS WAS
CONSIDERABLY BELOW SOME OF THE ESTIMATES CANVASSED IN THE PRESS
UP TO THE DAY OF THE AUCTION
HOWE
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CONFIDENTIAL