CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 1295
OF 131135Z MAY 92
INFO PRIORITY BTC HONG KONG
CONFIDENTIAL
(31
002731
MDHIAN 3783
TOP COPY Q DIST?
ра
سال
14/5.
118
YOUR TELNO 764: MR. GOODLAD'S VISIT TO HONG KONG: 25-28 MAY
1992.
1.
AS REQUESTED IN TUR THE FOLLOWING IS AN UPDATE ON THE HONG
KONG ECONOMY:
2.
IN 1991, HONG KONG RECORDED GDP GROWTH OF 3.9 PERCENT IN REAL TERMS. THIS REPRESENTS A PICK-UP IN ECONOMIC ACTIVITY AFTER TWO CONSECUTIVE YEARS OF SLOW GROWTH.
3.
THE ECONOMY CONTINUED TO GROW STEADILY IN THE FIRST QUARTER OF 1992. RE-EXPORTS SHOWED A MARKED INCREASE (ESTIMATED TO BE AROUND 30 PERCENT IN REAL TERMS), AND CONTINUED TO PROVIDE THE MAIN IMPETUS TO GROWTH. HOWEVER, THE PERFORMANCE OF DOMESTIC EXPORTS REMAINED SLACK. BOTH CONSUMER AND INVESTMENT DEMAND PICKED UP FURTHER IN THE FIRST QUARTER OF 1992.
THE STRUCTURAL TRANSFORMATION OF HONG KONG'S ECONOMY, LEADING TO A GREATER ORIENTATION TOWARDS SERVICES, CONTINUED. THERE HAS BEEN A SHARP DECLINE IN MANUFACTURING EMPLOYMENT, BUT THE MANPOWER THEREBY RELEASED HAS BEEN ENTIRELY ABSORBED BY THE TRADING AND SERVICES SECTORS. FULL EMPLOYMENT HAS BEEN MAINTAINED OVERALL. THE UNEMPLOYMENT RATE IN THE FIRST QUARTER OF 1992 WAS 2.3 PERCENT. IT HAS BEEN BELOW 3 PERCENT FOR THE PAST SIX YEARS.
5. THE KEY FACTOR UNDERLYING THIS STRUCTURAL CHANGE IS THE GROWING ECONOMIC RELATIONSHIP BETWEEN HONG KONG AND CHINA. ALTHOUGH HONG KONG IS SEPARATE ECONOMIC DEVELOPMENT OF SOUTHERN CHINA, TO THE BENEFIT OF BOTH SIDES. THE PEARL RIVER DELTA REGION, IN WHICH SOME THREE MILLION WORKERS ARE REPORTEDLY ENGAGED IN JOBS ASSOCIATED WITH HONG KONG COMPANIES, IS EFFECTIVELY AN EXTENSION OF HONG KONG'S PRODUCTION BASE. SOME 80 PERCENT OF INVESTMENT IN GUANGDONG COMES FROM OR THROUGH HONG KONG. IN 1991, 85 PERCENT OF GOODS RE-EXPORTED THROUGH HONG KONG WAS DESTINED FOR, OR ORIGINATED FROM, CHINA. 60 PERCENT OF ALL CHINA'S EXPORTS IN 1991 CAME THROUGH HONG KONG.
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