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MONDAY, NOVEMBER 24, 1986
DOMESTIC EXPORTS TO CHINA HAVE ALSO RECOVERED SIGNIFICANTLY, SUGGESTING THAT THE EFFECT OF CHINA'S TIGHTENING OF CONTROL SINCE APRIL 1985 OVER ITS FOREIGN EXCHANGE SPENDING MAY HAVE LARGELY BEEN ABSORBED.
IN THE THIRD QUARTER, THE ESTIMATED GROWTH RATES IN REAL TERMS OF DOMESTIC, EXPORTS TO THE FEDERAL REPUBLIC OF GERMANY, JAPAN, CHINA AND THE UNITED KINGDOM WERE 51 PER CENT, 28 PER CENT, 32 PER CENT AND 23 PER CENT RESPECTIVELY. THE CORRESPONDING GROWTH RATE FOR THE UNITED STATES WAS LOWER, AT ABOUT 11 PER CENT.
A MAJOR FACTOR BEHIND THE STRONG DOMESTIC EXPORT PERFORMANCE WAS THE IMPROVED DEMAND FOR HONG KONG'S PRODUCTS IN MOST OF THE MAJOR OVERSEAS MARKETS. ANOTHER CONTRIBUTORY FACTOR WAS THE DEPRECIATION OF THE HONG KONG DOLLAR. IN LINE WITH THAT OF THE U.S. DOLLAR UNDER THE LINKED EXCHANGE RATE SYSTEM, AGAINST MOST MAJOR CURRENCIES. WHICH HAS HELPED TO IMPROVE THE PRICE COMPETITIVENESS OF HONG KONG'S PRODUCTS.
RE-EXPORTS GREW BY ABOUT 20 PER CENT IN REAL TERMS IN THE THIRD QUARTER OF 1986 OVER THE SAME QUARTER LAST YEAR. THUS, COMPARED WITH A DECLINE OF 6 PER CENT IN THE FIRST QUARTER AND AN INCREASE OF 5 PER CENT IN THE SECOND QUARTER, A STRONG RECOVERY HAS BEEN OBSERVED DURING THE RECENT MONTHS.
THIS WAS ATTRIBUTABLE, IN PART, TO CHINA'S EFFORTS IN PROMOTING ITS EXPORTS, RESULTING IN AN INCREASED VOLUME OF CHINESE EXPORTS BEING CHANNELLED THROUGH HONG KONG TO OVERSEAS MARKETS.
RETAINED IMPORTS GREW BY ABOUT 17 PER CENT IN REAL TERMS IN THE THIRD QUARTER, REFLECTING A FIRM DOMESTIC DEMAND AND BUOYANT MANUFACTURING ACTIVITY. A LARGE PART OF THIS INCREASE COMPRISED RAW MATERIALS AND SEMI-MANUFACTURES FOR PRODUCTION. OVERALL IMPORTS GREW BY ABOUT 18 PER CENT IN REAL TERMS DURING THE SAME PERIOD.
THE REPORT INDICATES THAT BECAUSE THE GROWTH RATE IN VALUE TERMS OF TOTAL EXPORTS (DOMESTIC EXPORTS PLUS RE-EXPORTS), AT 24 PER CENT, WAS SLOWER THAN THAT OF IMPORTS, AT 27 PER CENT, A SMALLER VISIBLE TRADE SURPLUS, EQUIVALENT TO 6 PER CENT OF THE VALUE OF IMPORTS, WAS RECORDED IN THE THIRD QUARTER OF THIS YEAR, THAN IN THE THIRD QUARTER OF 1985, WHEN IT WAS 8 PER CENT.
ON THE FINANCIAL SECTOR, THE REPORT NOTES THE FOLLOWING DEVELOPMENTS: FIRST, DURING THE THIRD QUARTER OF 1986 THE EXCHANGE RATE OF THE HONG KONG DOLLAR AGAINST THE U.S. DOLLAR REMAINED STABLE AROUND THE LINKED RATE OF HK$7.80 TO US$1. HOWEVER, REFLECTING THE CONTINUED WEAKNESS OF THE U.S. DOLLAR IN THE FOREIGN EXCHANGE MARKET, THE EFFECTIVE EXCHANGE RATE INDEX OF THE HONG KONG DOLLAR FELL BY 1.5 PER CENT OVER THE PERIOD.
/SECOND, THERE