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MR RAISON'S VISIT TO CHINA & JAPAN
HONG KONG ECONOMY
Background
1.
where
The overall performance of the Hong Kong economy
during 1985 was disappointing by previous Hong Kong standards. Real GDP growth was under 1%, domestic exports declined by 5%, investment fell by 3% and imports grew by
68. The outlook for 1986 however appears to be good. The
devaluation of the United States dollar (to which the Hong Kong dollar is linked) last Autumn has improved Hong Kong's competitiveness in export markets and domestic export performance should further benefit from the expected growth
in the US and other major economies. Amongst the territory's major customers an exception is likely to be China, now Hong Kong's second largest market for domestic
exports,
measures adopted in mid-1985 to restrict imports and SO conserve foreign exchange are expected to remain in force throughout 1986 and SO further slow down the rate of growth of Hong Kong's domestic exports re-exports to the PRC. Despite this, total exports in 1986 have been forecast to rise by approximately 6%. The performance of the economy, particularly domestic exports, in the first half of the year has been encouraging. However, further and sustained improvement will be needed
that ensure
the forecast is met. A forecast rate of . growth of 6% although modest judged on Hong Kong's recent performances is more than satisfactory in comparison to the The expected levels of growth in other major economies. forecast growth rate for imports during the year is 6%, the
same as in 1985.
in the GDP growth is expected to be
region of 4.5%
to
and
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