the cost impact on Hong Kong's manufacturing sector should
be
relatively less severe. It should also be noted that a
considerable part of the
industries are met by
energy requirements of local
electricity supply, which ig
generated predominantly from coal.
To the extent that
industries elsewhere are also facing the same impact, the
of Hong Kong's industries may not
external
competitiveness
necessarily be undermined.
Effect on economic growth
11.
0.09%
As Iraq and Kuwait are not Hong Kong's major
trading partners, the direct effect of the Gulf crisis on
Hong Kong's external trade should be minimal. In 1989,
Hong Kong's domestic exports to Iraq and Kuwait represented
only 0.02% and 0.01dy of the total domestic exnorta thes
0.01% corresponding figures for re-exports were 0.09% and 0.23%.
indirect effect on Hong Kong's export performance, and
hence overall economic growth, is however likely to be much
significant, to the extent that the higher oil prices
will tend to dampen economic activity in the industrialised
countries which are Hong Kong's major export markets, and
The
more
consequently restrain
demand for Hong Kong's exports. How
large this adverse impact on the Hong Kong economy is
likely to be is not clearly known at the present stage. It
await assessments by foreign analysts of the effect
has to
of the oil price hike
on the growth rates of their