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FRIDAY, JULY 25, 1980
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+SOME WOULD SAY THE COMPANIES COULD TRY TO USE THEIR UNUSABLE QUOTAS BY SELLING AT CHEAPER PRICES, I AGREE, BUT THAT SURELY WILL RESULT IN A SITUATION WHERE HONG KONG AS A WHOLE WOULD EARN LESS AND WOULD NOT BE ACHIEVING THE AIM OF USING TO THE FULL THE LIMITED TRADING OPPORTUNITIES, + HE SAID.
MR TSAO SAID HIS DEPARTMENT HAD ALSO RECEIVED SUGGESTIONS THAT WHEN QUOTAS WERE TRANSFERRED, SOME OF THEM SHOULD GO TO THE COMPANY TO WHOM THE TRANSFER IS MADE.
+FIRST OF ALL, THAT WORD 'SOME' NEEDS TO BE DEFINED. HOW MUCH SHOULD THE TRANSFERROR RETAIN, AND HOW MUCH SHOULD THE TRANSFERREE GET? WHERE DOES ONE DRAW A LOGICAL LINE?+ HE ASKED.
+EVEN IF WE COULD COME TO AN AGREEMENT THAT THE LINE SHOULD BE DRAWN AT A PARTICULAR PERCENTAGE, THE RESULT WILL BE VERY SIMILAR TO NOT ALLOWING TRANSFERS. COMPANIES NOT ABLE TO USE THE IR PARTICULAR KIND OF HOLDING IN ONE YEAR WILL NOT BE WILLING TO LOSE PART OF THEIR HOLDING, BECAUSE THEY EXPECT TO BE ABLE TO USE THEIR QUOTAS IN FUTURE YEARS.
+THE NET RESULT WILL AGAIN BE FOR THESE COMPANIES TO ATTEMPT TO USE UP THEIR OWN QUOTAS AND THE CONSEQUENCE WILL AGAIN BE AN ATTEMPT TO TRADE DOWN, HE ADDED.
A FURTHER CONSEQUENCE OF COMPANIES BEING DISCOURAGED FROM MAKING TRANSFERS WOULD BE THE CESSATION OF TRANSFERS, THEREBY DEPRIVING THE SO-CALLED SMALL EXPORTERS AND MANUFACTURERS, WHO DID NOT HOLD ALLOCATIONS AT PRESENT, THE POSSIBILITY OF CONTINUING THE IR BUSINESS BY OBTAINING QUOTAS THROUGH TRANSFERS.
+WE ARE ADVISED THAT IN SUCH A SITUATION MOST, IF NOT ALL, OF THE SMALL EXPORTERS AND MANUFACTURERS WILL SIMPLY CEASE TO EXIST.
+ IN DEALING WITH THE SYSTEM, ONE MUST ADOPT A PRACTICAL AND PRAGMATIC APPROACH. LOGIC DOES NOT ALWAYS HAVE ITS PLACE IN A SYSTEM OF THIS SORT. IT IS, OF COURSE, A VERY DIFFICULT TASK TO TRY TO STRIKE A BALANCE BETWEEN WHAT IS LOGICAL AND FAIR ON THE ONE HAND, AND WHAT MAKES COMMERCIAL SENSE ON THE OTHER HAND.
+ON THE 'TRANSFER PROVISIONS' WE HOPE WE HAVE STRUCK THAT BALANCE BY ALLOWING TRANSFERS, BUT PENALISING 'PERSISTENT' TRANSFERRORS, HE SAID.
IN REVIEWING THE QUOTA SYSTEM THE GOVERNMENT HAD TAKEN CERTAIN STEPS IN A GENERAL DIRECTION OF TIGHTENING UP THE SYSTEM, BUT IN TAKING EVERY STEP, THEY HAD HAD TO LOOK AT THE CONSEQUENCES OF SUCH STEPS.
+WHERE THE CONSEQUENCES ARE EITHER ADVERSE OR EVEN UNCLEAR. WE HAVE ATTEMPTED EITHER NOT TO TAKE THE STEP, OR TO TAKE A SMALLER TESTING STEP.
+WE HAVE NOT DONE A NUMBER OF THINGS WHICH HAVE BEEN URGED UPON US, NOT NECESSARILY BECAUSE THEY ARE NOT IN THEMSELVES IMPROVEMENTS TO THE SYSTEM, BUT RATHER BECAUSE WE ARE NOT CLEAR AS TO WHAT ARE THE LIKELY CONSEQUENCES, HE SAID.