WEDNESDAY, MARCH 26, 1986
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BUT NOT NECESSARILY + IT HAS SERVED HONG KONG WELL SO FAR FOREVER, HE SAID, AND WENT ON TO GIVE A NUMBER OF REASONS.
AFTER THE SIGNING OF THE JOINT DECLARATION AND GIVEN THE EXPERIENCE IN THE DEVELOPMENT OF POLITICAL AFFAIRS SINCE, MANY PEOPLE HAD REGAINED THEIR CONFIDENCE.
SECOND, HE SAID, THE US DOLLAR HAD FOR VARIOUS REASONS DEPRECIATED" CONSIDERABLY OVER THE PAST FEW MONTHS AGAINST MAJOR CURRENCIES, DRAGGING DOWN THE HONG KONG DOLLAR.
+1 AM CONVINCED THAT WE SHOULD NOT FOLLOW THE US DOLLAR ANY FURTHER, TAKING INTO CONSIDERATION THE FUNDAMENTAL FACT THAT THE ECONOMY OF HONG KONG IS DIFFERENT FROM THAT OF THE UNITED STATES IN MANY ASPECTS,+ HE SAID,
MR WONG ALSO NOTED THAT THE NORMAL BENEFIT OF EXPORT COMPETITIVENESS BEING ENHANCED BY A WEAKER CURRENCY COULD NOT BE REALISED IN FULL BECAUSE THE UNITED STATES WAS HONG KONG'S LARGEST EXPORT MARKET.
FURTHERMORE, HE SAID, THE ARTIFICIAL WEAKNESS OF THE HONG KONG DOLLAR MIGHT HAVE ADVERSELY AFFECTED DECISIONS BY FOREIGN COMPANIES ON WHETHER TO INVEST IN HONG KONG AND IT WOULD ALSO CONTRIBUTE TO INFLATIONARY PRESSURES.
TO LET THE DOLLAR FLOAT AGAIN MIGHT RESULT IN SOME INITIAL SPECULATION, BUT HE WAS SURE THAT MARKET FORCES WOULD SOON FIND A REASONABLE LEVEL FOR THE CURRENCY AND THE ECONOMY WOULD THEN DEVELOP NORMALLY.
REFERRING TO PUBLIC EXPENDITURE, MR WONG BELIEVED THERE WAS A NEED TO CONTAIN ITS GROWTH.
+BY SETTING THE PUBLIC EXPENDITURE GROWTH AT 75 PER CENT OF THE GDP GROWTH, THE RESULTANT PUBLIC EXPENDITURE GROWTH RATE SHOULD BE ABOUT 8.2 PER CENT IN MONEY TERMS, A MORE COMFORTABLE FIGURE IN CONSIDERING OUR LONG-TERM INTEREST,+ HE SAID.
HE ALSO CONSIDERED THAT THE GROWTH OF THE CIVIL SERVICE AT BETWEEN TWO AND TWO AND A HALF PER CENT AS SUGGESTED BY THE FINANCIAL SECRETARY COULD BE FURTHER CONSTRAINED IF A MORE RESTRICTIVE CRITERION WAS APPLIED, CONFINING STAFF INCREASES TO ONLY THE ESSENTIAL SERVICES.
COMMENTING ON THE BUDGET AS A WHOLE, MR WONG SAID THE MEDIUM-RANGE FORECAST WAS A USEFUL PLANNING TOOL INSOFAR AS IT PROVIDED INDICATORS FOR FUTURE BUDGETS.
HOWEVER, IT WAS FELT THAT THE FORECAST OF A FOUR PER CENT GROWTH RATE IN RE-EXPORTS MIGHT BE A LITTLE CONSERVATIVE IN VIEW OF THE CONTINUING GROWTH IN THE CHINA MARKET, HE SAID.
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