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TUESDAY, MAY 26, 1987
THIS WAS PROBABLY DUE, IN PART, TO INCREASED OUTWARD PROCESSING TRADE WITH CHINA, IN LINE WITH THE STRONG GROWTH IN HONG KONG'S DOMESTIC EXPORTS TO OVERSEAS MARKETS.
DOMESTIC EXPORTS TO THE FEDERAL REPUBLIC OF GERMANY, THE UNITED KINGDOM AND JAPAN GREW MORE RAPIDLY THAN THOSE TO THE UNITED STATES IN THE FIRST QUARTER OF 1987, REFLECTING THE SHARP DEPRECIATION OF THE HONG KONG DOLLAR AGAINST THE EUROPEAN CURRENCIES AND THE JAPANESE YEN.
THE STRONG GROWTH OF RE-EXPORTS IN THE FIRST QUARTER OF 1987 WAS MAINLY DUE TO AN UPSURGE IN RE-EXPORT TRADE WITH CHINA WHICH HAS FEATURED PROMINENTLY BOTH AS A MARKET AND AS A SOURCE OF HONG KONG'S RE-EXPORTS.
RETAINED IMPORTS GREW BY ABOUT 27 PER CENT IN REAL TERMS IN THE FIRST QUARTER OF 1987 OVER THE SAME QUARTER IN 1986, REFLECTING A FIRM DOMESTIC DEMAND AND BUOYANT MANUFACTURING ACTIVITY. A LARGE PART OF THIS INCREASE COMPRISED RAW MATERIALS AND SEMI-MANUFACTURES FOR MANUFACTURING PRODUCTION. OVERALL IMPORTS GREW BY ABOUT 36 PER CENT IN REAL TERMS DURING THE SAME PERIOD.
THE REPORT FURTHER POINTS OUT THAT OVER THIS PERIOD, THE GROWTH RATE OF THE VALUE OF TOTAL EXPORTS, AT 41 PER CENT, WAS ABOUT THE SAME AS THAT OF IMPORTS. HENCE A VISIBLE TRADE GAP OF SIMILAR MAGNITUDE TO THAT IN THE FIRST QUARTER OF 1986, EQUIVALENT TO 4 PER CENT OF THE VALUE OF IMPORTS, WAS RECORDED IN THE FIRST QUARTER OF THIS YEAR.
ON THE FINANCIAL SECTOR, THE REPORT NOTES THE FOLLOWING DEVELOPMENTS. FIRST, THE EXCHANGE RATE OF THE HONG KONG DOLLAR REMAINED STEADY AGAINST THE US DOLLAR THROUGHOUT THE FIRST QUARTER OF 1987. NOTWITHSTANDING THE SPECULATIVE PRESSURES ON THE LINKED EXCHANGE RATE SYSTEM EXPERIENCED IN JANUARY AND EARLY FEBRUARY, A MAXIMUM DEVIATION OF ONLY 0.6 PER CENT FROM THE LINKED RATE WAS RECORDED.
/SECOND, HONG KONG