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FRIDAY, AUGUST 28, 1981
REDUCED PROFIT MARGINS AND THE DEPRECIATION OF EXCHANGE VALUE OF THE HONG KONG DOLLAR DURING THE LAST EIGHT MONTHS OF 1980 HAVE ENABLED THE EXPORT SECTOR TO REMAIN COMPETITIVE.
PRICES OF DOMESTIC EXPORTS IN HONG KONG DOLLAR TERMS HAVE INCREASED BY ONLY 3.2 PER CENT DURING THE SIX MONTHS ENDING MAY 1981 ALTHOUGH THE IMPORT PRICES OF RAW MATERIALS HAVE
INCREASED MORE SHARPLY.
NEVERTHELESS THE REPORT CAUTIONS THAT THE ORDER BOOK POSITION AND THE SLOW GROWTH IN RETAINED IMPORTS OF RAW MATERIALS IN THE FIRST HALF OF THIS YEAR DO NOT SUGGEST THAT A SPECTACULAR UPSURGE
IN THE GROWTH RATE OF DOMESTIC EXPORTS IS IMMINENT.
THE REPORT SHOWS THAT ENTREPOT TRADE CONTINUED TO EXPAND RAPIDLY IN THE FIRST HALF OF THIS YEAR, WITH CHINA CONSOLIDATING
ITS POSITION BOTH AS A SOURCE AND AS A MARKET FOR HONG KONG'S RE-EXPORTS.
THE GROWTH RATE OF IMPORTS IN MONEY TERMS WAS ALSO RAPID AND WAS ACTUALLY SLIGHTLY FASTER THAN THAT OF TOTAL EXPORTS (DOMESTIC EXPORTS PLUS RE-EXPORTS), BUT NOT TO THE EXTENT OF SERIOUSLY AFFECTING THE GENERAL STABILITY OF THE VISIBLE TRADE ACCOUNT.
CONSEQUENTLY, THE VISIBLE TRADE +GAP+ (THAT IS THE PROPORTION OF THE VALUE OF IMPORTS NOT COVERED BY THE VALUE OF TOTAL EXPORTS) IN THE FIRST HALF OF THIS YEAR, WAS LARGER, THOUGH NOT SIGNIFICANTLY SO, THAN THAT IN THE FIRST HALF OF 1980.
ON THE FINANCIAL SECTOR, THE REPORT INDICATES THAT THE GROWTH RATE OF MONEY SUPPLY REMAINED RAPID DURING THE FIRST HALF OF 1981 AND THIS WAS ATTRIBUTED MAINLY TO RAPID GROWTH IN LOANS AND ADVANCES. BUT THE HIGH REAL COST OF BORROWING HAS ALREADY SHOWN RESTRAINING EFFECT ON THE GROWTH OF DEMAND FOR CREDIT TO THE EXTENT THAT THE GROWTH RATE OF LOANS AND ADVANCES DURING THE FIRST HALF OF 1981 HAD EASED SLIGHTLY COMPARED WITH THAT IN 1980,
NOTWITHSTANDING MINOR FLUCTUATIONS, DURING THE FIRST HALF OF 1981, THE HONG KONG DOLLAR WAS STABLE AND FIRM IN TERMS OF ITS EFFECTIVE EXCHANGE RATE INDEX.
IN ADDITION TO THE EXISTING SERIES OF MONETARY STATISTICS, THE REPORT COVERS THE NEW SERIES OF MONETARY STATISTICS, WHICH PROVIDES FIGURES ON HONG KONG DOLLAR MONEY SUPPLY, LENDING FOR USE IN HONG KONG AND OTHER INFORMATION WHICH WAS NOT AVAILABLE IN THE PAST.
ON THE LABOUR SECTOR, THE REPORT POINTS OUT THAT STATISTICS ON LABOUR FORCE CHARACTERÍSTICS AVAILABLE UP TO MARCH 1981 INDICATE THAT THE SEASONALLY ADJUSTED UNEMPLOYMENT RATE CONTINUED TO INCREASE SLIGHTLY, BUT DESPITE RECENT INCREASES, THE LEVEL OF UNEMPLOYMENT IS LOW BY COMPARISON WITH INDUSTRIALISED COUNTRIES ELSEWHERE.
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CONTRIBUTING TO THIS INCREASE IN UNEMPLOYMENT WAS THE FACT THAT THE GROWTH RATE OF THE SUPPLY OF LABOUR, BECAUSE OF THE DIRECT AND INDIRECT EFFECTS OF IMMIGRATION, WAS TOO RAPID FOR THE ECONOMY TO ABSORB, DESPITE RAPID GROWTH IN DEMAND FOR LABOUR GENERALLY AND IN THE TERTIARY SERVICES SECTORS IN PARTICULAR.
THE REPORT