11
Thursday, June 22, 1972
Internally, there has been some inflation in recent years, the general
consumer price index having risen by about 30 per cent over the last seven years
and the modified consumer price index by about 35 per cent over the same period.
"Inflation is however a world-wide problem and Hong Kong's performance
in this regard is better than that of most industrial countries during this
period. It must also be recognised that incomes, including wages, have in
general risen substantially faster than prices and that the standard of living
of the community has therefore improve considerably.
"The petition also implies that the recent rise in commercial and
industrial rents is the major cause of inflation and states that in order to
reduce inflation it is necessary to control these rents. This statement seems to
be based upon a misunderstanding of the current economic situation.
"The state of Hong Kong's economy is determined primarily by external
influences, namely the demand for our exports in overseas markets and the prices
of imported products, neither of which is under our control.
"In recent years there has been a very substantial rise in our exports,
and this has led to increased demands on productive capacity and a shortage of
labour, one consequence of which has been substantial increases in the wages of
most workers. At the same time import prices have increased considerably.
"These are the two factors which have been mainly responsible for
inflation in Hong Kong. Higher rents have therefore been a result rather than a
cause of inflation."
Mr. Akers-Jones