XN000022-1973-03-15 — Page 5

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Thursday, March 15, 1973

WARNING ON LOSING OUT IN TRADE COMPETITION

Government Urged To Prepare For The Worst

Hong Kong products are becoming increasingly expensive on overseas markets and less attractive to buyers, the Hon. T.K. Ann said during the annual.

Budget debate in the Legislative Council today.

He said that the Hong Kong dollar had been made dearer to foreign

clients who paid in American currency.

What was disappointing, said Mr. Ann, was that the Financial Secretary had practically said nothing about the external relationship of the Hong Kong

dollar when he presented his Budget Estimates for the new financial year.

"I have further found that little has been mentioned about the

future of our manufacturing industry, or the effect his budget will have on this aspect of our economic activities apart from some tax relief proposals,"

he added.

Although Hong Kong had fared better than others, said Mr. Ann, "the

accelerated inflationary trend in the economies of our trading partners in the

past two years has much camouflaged our failure to achieve comparable growth

in our export performance,"

He emphasised that whenever there was a change in the external value of the Hong Kong dollar, local manufacturers and exporters were forced to suffer

the loss, unless their buyers agreed to a corresponding increase in price.

The argument that the nature of Hong Kong's economy prevented costs and

prices outrunning those of its export markets was no longer valid, he said, since overseas buyers, especially in the United States, were "resolutely resisting our new prices which are to be based on the new exchange rate of HK$5.08."

Losing