THURSDAY, MARCH 25, 1976
QUOTAS RESULT IN HIGHER PRICES ******
1
THE HON. FRANCIS TIEN SAID TODAY THAT IF OVERSEAS IMPORTERS WANTED THE PRICES OF QUOTA-CONTROLLED HONG KONG PRODUCTS TO BE REDUCED, THEY SHOULD URGE THEIR OWN GOVERNMENTS TO INCREASE OR TO REMOVE THE QUOTAS.
ADDRESSING THE LEGISLATIVE COUNCIL IN THE ANNUAL BUDGET DEBATE, HE POINTED OUT THAT THE GUIDING PRINCIPLE OF THE TEXTILE QUOTA CONTROL SYSTEM WHICH HAD ALWAYS BEEN FOLLOWED WAS TO MAKE THE MAXIMUM USE OF EXPORT OPPORTUNITIES, BY SELLING AS MUCH AS POSSIBLE TO THE FULL RESTRAINT LIMITS IMPOSED ON HONG KONG.
THE SYTEM FOR TRANSFERRING QUOTAS FROM ONE COMPANY TO ANOTHER WAS DESIGNED TO MAKE THIS EASIER TO ACHIEVE, HE SAID.
MR. TIEN THOUGHT IT WAS WRONG TO TALK IN TERMS OF THE PRICE OF QUOTAS, OR 'QUOTA PREMIUM AS IT WAS MORE COMMONLY KNOWN.
HE EXPLAINED THAT ANYTHING WHICH WAS SCARCE IN RELATION TO DEMAND WOULD NATURALLY PUSH ITS PRICE HIGHER.
+IF IMPORTING COUNTRIES CHOOSE TO LIMIT SUPPLY TO A LEVEL LOWER THAN THAT OF DEMAND, THEY MUST EXPECT TO PAY MORE,+ MR. TIEN SAID. + THIS INCREASE IN PRICE IS CAUSED BY THE SCARCITY OF THE GOODS IN QUESTION, BY THE RESTRAINT LIMITS THEMSELVES, NOT BY THE QUOTA SYSTÉM, WHICH IS MERELY A METHOD OF DISTRIBUTION BUT CANNOT INCREASE THE QUANTITY AVAILABLE. THE ONLY REMEDY IS TO INCREASE THE SUPPLY.+
HE STRESSED # +IF THE IMPORTERS WISH TO SEE PRICES REDUCED, THE BEST WAY THEY CAN DO THIS IS TO PERSUADE THEIR OWN GOVERNMENTS TO INCREASE THE SIZE OF THE QUOTAS HONG KONG IS PERMITTED TO EXPORT, OR EVEN BETTER TO REMOVE THEM ALTOGETHER,+
HE ADDED THAT THE TEXTILE ADVISORY BOARD, OF WHICH HE WAS A MEMBER, WOULD SOON BE LOOKING INTO THE WHOLE TEXTILE QUOTA SYSTEM WHERE HE WAS SURE IMPROVEMENTS COULD BE MADE, BUT ANY CHANGES WOULD NEED TO FOLLOW THE GUIDING PRINCIPLE HE MENTIONED.
MR. TIEN SOUNDED A WARNING ON POSSIBLE OVERLOADING OF THE CONSTRUCTION INDUSTRY.
HE SAID HONG KONG WAS BEGINNING TO PASS OUT OF THE PERIOD IN WHICH PLENTY OF CAPACITY WAS AVAILABLE IN THE BUILDING INDUSTRY, INTO A STAGE WHEN A STEEP INCREASE IN THE DEMAND MADE ON IT, INCLUDING THE MASS TRANSIT RAILWAY, WAS LIĶELY TO COINCIDE WITH A REVIVAL OF PRIVATE INVESTMENT.
/+THE LAST