of information between the British and Chinese sides until the
year 2000. It will meet in Peking, London and Hong Kong, at least
once in each place per annum. From 1 July 1988, it will be based
principally in Hong Kong.
C HONG KONG AFTER THE AGREEMENT
(i) THE ECONOMY
in
4.
All the indicators show that Hong Kong's economy, having borne
the uncertainties of the past
of the past two years with
two years with resilience, is now
expanding with renewed confidence. The Hong Kong Stock Exchange
Index stook at 989.19 points on 1 October 1984, just after the
initialling of the draft agreement. On 12 April 1985 it stood at
1492.18. The linking of the Hong Kong dollar
of the Hong Kong dollar to the US dollar
October 1983 has stabilised the currency and renewed confidence in
it the Hong Kong dollar on 12 April stood two cents higher against
the US dollar than it had six months before, and, like the US
dollar, is therefore very strong against other currencies.
5. Hong Kong's Financial Secretary presented his budget for 1985/86
to Hong Kong's Legislative Council on 27 February. His budget
projects good economic prospects for Hong Kong in 1985:
(a)
a growth rate in the GDP of 7%;
(b)
(c)
(d)
6.
a growth in domestic exports of 11% and in re-exports of 30%,
giving a growth for total exports of 18%
a growth of private investment in plant machinery of 16% and in
building and construction of 2%; and
an inflation rate of 5.5%.
The Financial Secretary forecast a budget deficit of HK$ 1
billion for the coming year. This follows three years of deficits,
produced by a combination of world recession, a fall in Hong Kong
property values, and political uncertainty over the future. With uncertainty removed by the Agreement, and Hong Kong's economy
benefitting from renewed confidence, the Financial Secretary looks
forward to a return to balanced budgets in a year's time.