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WEDNESDAY, NOVEMBER 7, 1984
THUS, SOME OF THIS INCREASE IN TRADE REPRESENTED THE TRANSFER TO CHINA OF PROCESSES PREVIOUSLY CARRIED OUT HERE, SO THAT ITS CONTRIBUTION TO HONG KONG'S GDP WAS PROBABLY LOWER THAN FOR DOMESTIC EXPORTS TO OTHER MARKETS, HE ADDED.
IN SOME AREAS THE PROCESS BEING UNDERTAKEN IN CHINA COULD NO LONGER BE UNDERTAKEN PROFITABLY IN HONG KONG, WHILE THE PROCESSING IN CHINA MIGHT MAKE POSSIBLE THE RETENTION OF OTHER RELATED ACTIVITIES IN HONG KONG.
SOMETIMES, WITHOUT THE PROCESSING IN CHINA, THE FINAL
PRODUCT COULD NOT BE MADE HERE AT ALL.
+THIS EXCHANGE AND INTER-DEPENDENCE IS A FEATURE OF OUR RELATIONSHIP WITH CHINA THAT I BELIEVE WILL GROW AND CONTRIBUTE SIGNIFICANTLY TO BOTH ECONOMIES,+ MR JACOBS SAID.
HE HAD NO DOUBT THAT EVEN CLOSER COOPERATION IN THE FLOW OF BOTH GOODS AND SERVICES WOULD DEVELOP OVER THE COMING YEARS.
ON CHANGES IN THE GROWTH RATES OF PLANT AND MACHINERY, HE SAID IT WAS TO BE EXPECTED THEY WOULD LAG BEHIND CHANGES IN THE EXPANSION RATE OF THE OTHER COMPONENTS OF VISIBLE TRADE.
INVESTORS +BEFORE COMMITTING THEMSELVES TO NEW INVESTMENT, HAVE TO BE CONVINCED THAT ANY UPWARD MOVEMENT IN EXPORT GROWTH WILL BE SUSTAINED.
+EVEN AFTER A DECISION TO INVEST HAS BEEN MADE IT TAKES TIME FOR THE PLANT AND MACHINERY INVOLVED TO SHOW UP IN THE TRADE ACCOUNTS.
+GIVEN THAT THE ECONOMY HAS OPERATED OVER THE PAST TWO YEARS UNDER THE SHADOW OF UNCERTAINTY ABOUT ITS FUTURE, IT IS NOT SURPRISING THAT INVESTORS HAVE BEEN RELUCTANT TO COMMIT THEMSELVES,+ HE SAID.
THAT SHADOW, HE ADDED, HAD BEEN LIFTED AS A RESULT OF THE INITIALLING OF THE SINO-BRITISH DRAFT AGREEMENT.
THIS, COMBINED WITH HONG KONG'S IMPROVED ECONOMIC PERFORMANCE, SHOULD ENCOURAGE FURTHER INVESTMENT IN THE ADDITIONAL AND IMPROVED PLANT AND MACHINERY NEEDED TO SUSTAIN ECONOMIC GROWTH IN THE FUTURE, HE SAID.
FOR THE THREE QUARTERS BEGINNING IN THE SECOND QUARTER OF 1983, RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES HAD GROWN CONSIDERABLY FASTER THAN DOMESTIC EXPORTS.
MR JACOBS FELT THAT THIS SUGGESTED THAT SOME OF THE SLOWDOWN IN THE GROWTH RATE OF SUCH IMPORTS THIS YEAR HAD BEEN CAUSED BY SUBSEQUENT INVENTORY ADJUSTMENT.
/+PROBABLY THE