THURSDAY, APRIL 13, 1978
18
CHANGING STRUCTURE OF HK'S ECONOMY
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THE GOVERNMENT IS AWARE OF THE DEVELOPING SHIFT IN EMPHASIS IN OUR ECONOMY FROM MANUFACTURING TO TERTIARY INDUSTRIES AND IS KEEPING A CLOSE EYE+ ON SUCH DEVELOPMENT, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE SAID TODAY.
WINDING UP THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, MR. HADDON-CAVE SAID UNTIL THE GOVERNMENT HAS CLEAR EVIDENCE THAT SUCH DEVELOPING SHIFT IS UNDESIRABLE, IT WILL CONTINUE TO BE SYMPATHETIC TO THE GROWTH OF TERTIARY INDUSTRIES AND WILL. DO ITS BEST TO FACILITATE THAT GROWTH OR, AT LEAST, NOT TO
IMPEDE IT.
HE SAID: THE MODIFICATIONS TO THE STAMP ORDINANCE, MOST OF WHICH ARE OF BENEFIT TO INDUSTRIES IN TERTIARY SECTOR, AND THE RECENT LIFTING OF THE MORATORIUM ON THE GRANTING OF BANK. LICENCES ARE POLICY DECISIONS REFLECTING THIS SYMPATHY.+
HE NOTED THAT MANUFACTURING INDUSTRIES MAY BE DOMINANT IN TERMS OF EXPORTS, BUT THEY ARE ALSO RELATIVELY IMPORT-INTENS IVE, WHILE TERTIARY INDUSTRIES ARE ALMOST CERTAINLY LESS EXPORT-ORIENTED AND LESS IMPORT-INTENSIVE.
ON OUR POSITION IN THE WORLD ECONOMY. MR. HADDON-CAVE SHARED THE HON. Q.W. LEE'S REMARKS THAT CHANGES IN RECENT YEARS HAVE RESULTED IN HONG KONG BEING +MUCH MORE VULNERABLE TO INTERNATIONAL DEVELOPMENTS (THAN IN THE PAST).+
+FOR EXAMPLE,+ HE SAID, +OUR INTERNAL PRICE LEVEL IS NOW MORE INFLUENCED BY THE MARKETING STRATEGY OF OUR MAIN SUPPLIERS- OUR INTEREST RATE STRUCTURE USED TO BE LARGELY DETERMINED BY
INTERNAL DEMAND AND SUPPLY FACTORS, BUT THIS IS NO LONGER THE CASE OUR STOCK MARKET IS NOW INFLUENCED BY THE STATE OF OTHER MARKETS- AND THE HONG KONG DOLLAR, WHICH USED TO HAVE A FIXED RELATIONSHIP FIRST WITH STERLING AND LATER WITH THE U.S. DOLLAR, IS NOW FLOATING.+
+THESE CHANGES. TAKEN TOGETHER WITH THE EMERGENCE OF THE FINANCIAL SERVICES SECTOR OF OUR ECONOMY, INVOLVING GREATLY ENLARGED CAPITAL FLOWS ACROSS THE EXCHANGES, HAVE HIGHLIGHTED THE IMPORTANCE OF CONFIDENCE IN HONG KONG, NOT JUST ON THE PART OF HONG KONG RESIDENTS, OR EVEN OF OVERSEAS INVESTORS IN OUR MANUFACTURING INDUSTRIES, BUT ALSO OF THE INTERNATIONAL FINANCIAL COMMUNITY.+
BUT HE SOUNDED A NOTE OF CAUTION AND SAID: +IF ITS CONFIDENCE IN HONG KONG GENERALLY, AND IN THE GOVERNMENT'S MANAGEMENT OF OUR FISCAL, BUDGETARY, ECONOMIC AND MONETARY AFFAIRS WERE TO BE ERODED, THE EFFECT COULD BE QUITE DISASTROUS.
+ IN OTHER WORDS, WE LIVE IN A MUCH RISKIER, BECAUSE IT IS A MUCH MORE EXPOSED, ENVIRCHMENT AND SO PRUDENT MANAGEMENT.CE. OUR AFFAIRS. IS MORE VITAL THAN EVER, HE ADDED,
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/REPLYING TO .............