SATURDAY, NOVEMBER 12, 1977
HONG KONG FACES SERIOUS CONSEQUENCES
IF EEC CUTS BACK ON OUR TEXTILE AND CLOTHING EXPORTS
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THE CONSEQUENCES FOR HONG KONG WILL BE VERY SERIOUS INDEED IF THE EEC ARE ALLOWED TO SUCCEED WITH THE IR THREAT OF CUTTING BACK ON OUR EXPORTS OF TEXTILES AND CLOTHING.
ACTING FINANCIAL SECRETARY, MR. DAVID JEAFFRESON, SAID THIS TODAY AT THE OPENING OF A TWO-WEEK SEMINAR FOR 55 LOCAL FINANCIAL JOURNALISTS ORGANISED BY THE HONG KONG JOURNALISTS ASSOCIATION.
+SUCH IS THE SIGNIFICANCE OF THE EEC AS A MARKET FOR US THAT A CUT BACK OF THE SIZE THEY ARE PROPOSING WOULD RESULT IN A REDUCTION OF OUR INCREASE IN PUBLIC EXPENDITURE OF TWO OR THREE PER CENT A YEAR WITH DAMAGING CONSEQUENCES TO OUR ASPIRATIONS FOR DEVELOPING SERVICES TO THE PUBLIC,+ HE WARNED.
MR. JEAFFRESON WAS EXPLAINING TO THE JOURNALISTS FIVE BUDGET GUIDELINES AND THE REASONING BEHIND THEM.
HE SAID WE NEEDED TO HAVE SOME IDEA AS TO THE RATE AT WHICH PUBLIC EXPENDITURE COULD GROW IN REAL TERMS, AND, BASED ON HISTORICAL EXPERIENCE IN THE 70S, WE HAD CONCLUDED THAT THIS RATE WAS ABOUT 10 PER CENT A YEAR.
+THIS IS VERY HIGH AND IT WILL HAVE TO BE ADJUSTED DOWNWARDS QUICKLY IF WE SEE CLOUDS ON THE HORIZON, HE SAID.
+THERE IS ONE PARTICULARLY BLACK CLOUD THERE. THIS IS THE THREAT AND IT IS A VERY REAL THREAT IMPOSED BY THE EEC TO CUT
- BACK QUITE DRASTICALLY ON OUR EXPORTS OF TEXTILES AND CLOTHING.
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+I DON'T PROPOSE NOW TO GO INTO THE RIGHTS AND WRONGS OF WHAT THE EEC ARE DOING, BUT THE CONSEQUENCES FOR HONG KONG WILL BE VERY SERIOUS INDEED IF THE EEC ARE ALLOWED TO CONTINUE.+
MR. JEAFFRESON GAVE FIVE BUDGET GUIDELINES: THE SIZE OF THE PUBLIC SECTOR- THE RELATIONSHIP OF CAPITAL AND RECURRENT ACCOUNTS- THE RESIDUAL DEFICIT ON CAPITAL ACCOUNT DIRECT AND INDIRECT TAXATION- AND THE FUTURE.
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ON THE SIZE OF THE PUBLIC SECTOR, HE SAID ONE OF THE MOST IMPORTANT CONSIDERATIONS WAS THE TRADE ORIENTATED NATURE OF OUR ECONOMY.
→THE FACT OF THE MATTER IS THAT WE DEPEND ON THE OUTSIDE WORLD FOR MOST THINGS OUR FOOD, OUR RAW MATERIALS, SEMI-MANUFACTURES, OUR CAPITAL GOODS AND OUR CONSUMER GOODS GENERALLY.
+TO PAY FOR THE REQUIREMENTS OF OUR PEOPLE AND THE IR INDUSTRIES, WE HAVE TO EXPORT VIRTUALLY OUR ENTIRE PRODUCTION FROM MANUFACTURING. IN CONSEQUENCE, OUR VISIBLE AND INVISIBLE
IMPORTS AND EXPORTS ARE VALUED AT ROUGHLY TWICE OR 200 PER CENT OF OUR GROSS DOMESTIC PRODUCT.
/BY CONTRAST,