WEDNESDAY, OCTOBER 8, 1986
1986
GOVERNOR SAYS DOLLAR LINK WILL BE MAINTAINED
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THERE ARE NO PLANS TO CHANGE THE LINK BETWEEN THE HONG KONG AND UNITED STATES DOLLARS WHICH HAD BENEFITTED THE HONG KONG ECONOMY, THE GOVERNOR, SIR EDWARD YOUDE, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
SPEAKING ON THE ECONOMIC AND FINANCIAL SITUATION IN HIS ANNUAL ADDRESS, SIR EDWARD SAID HONG KONG DOMESTIC EXPORTS HAD GROWN EIGHT PER CENT IN THE FIRST HALF OF THIS YEAR COMPARED WITH THE SAME PERIOD LAST YEAR.
HE ADDED: +A MAJOR FACTOR IN THE REVIVAL OF DOMESTIC EXPORTS HAS BEEN THE DEPRECIATION OF THE HONG KONG DOLLAR IN LINE WITH THE U.S. DOLLAR, AGAINST MOST OTHER MAJOR CURRENCIES DUE TO THE LINKED EXCHANGE RATE SYSTEM.
+THIS HAS RESULTED IN THE PRICES OF OUR GOODS BECOMING MORE COMPETITIVE IN SOME OF OUR MAJOR MARKETS. DESPITE THIS RELATIVE DEPRECIATION, THE RATE OF INFLATION HAS REMAINED LOW AT ABOUT THREE
THIS IS DUE IN PART TO LOWER PER CENT DURING THE LAST 12 MONTHS. WORLD COMMODITY PRICES.+
THE GOVERNOR SAID THAT THE STABILITY OF THE VALUE OF THE HONG KONG DOLLAR AGAINST THE U.S. DOLLAR IN RECENT MONTHS PROVIDED FURTHER EVIDENCE OF THE BENEFIT OF THE FIXED EXCHANGE RATE SYSTEM TO HONG KONG.
+LET ME REPEAT AGAIN - THERE ARE NO PLANS TO CHANGE IT. +
SIR EDWARD SAID THAT EXPORT RECOVERY HAD HELPED MAINTAIN EMPLOYMENT AND BOOST REAL WAGE LEVELS. UNEMPLOYMENT REMAINED STABLE AT 2.9 PER CENT AND UNDEREMPLOYMENT 1.7 PER CENT. HE SAID THE SIGNS INDICATED CONTINUING GROWTH IN DEMAND FOR LABOUR PARTICULARLY IN THE DISTRIBUTION TRADES AND IN FINANCIAL AND OTHER BUSINESS SECTORS.
LOOKING AHEAD THE GOVERNOR SAID THE PROSPECT WAS FOR CONTINUED EXPORT-LED GROWTH, LOW UNEMPLOYMENT AND MODERATE INFLATION. THE FORECAST GROWTH RATE OF 5.6 PER CENT WAS CONSIDERABLY HIGHER THAN LAST YEAR'S FIGURE.
HOWEVER, HE WARNED THAT THE THREAT OF INCREASED PROTECTIONISM REMAINED AND WOULD HAVE A DIRECT IMPACT ON OUR ABILITY TO EXPORT AND WOULD UNDERMINE EFFORTS TO ACHIEVE THE MORE LIBERAL WORLD TRADING ENVIRONMENT SO VITAL TO HONG KONG.
+HONG KONG'S EFFORTS TO COUNTER THE ARGUMENTS FOR PROTECTIONISM, WHEREVER THEY MAY BE PUT FORWARD, WILL CONTINUE, HE PLEDGED.
REVIEWING THE TRADE AGREEMENTS NEGOTIATED DURING THE YEAR SIR EDWARD SAID THE APRIL AGREEMENT MAKING HONG KONG A CONTRACTING PARTY TO THE GENERAL AGREEMENT ON TARIFFS AND TRADE ENSURED HONG KONG PRODUCTS WOULD CONTINUE TO HAVE ACCESS. ON MOST FAVOURED NATION TERMS, TO MARKETS WHICH ACCOUNTED FOR OVER FOUR-FIFTHS OF
WORLD TRADE.
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