XN000022-1973-05-09 — Page 3

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Wednesday, May 9, 1973

In attempting to measure cost of living increases, he explained,

"It is the basic underlying trend in consumer prices that matters."

The best way to determine this was to iron out seasonal fluctuations

by comparing the average figure for the index over different 12 month periods.

"In other words, once we make allowances for seasonal influences, 11

he said, "the increase in our cost of living during the first quarter of this

year as measured by the Consumer Price Index was not much more than

a third of the unadjusted and misleading increase in the index over this three

month period,"

Mr. Jones explained that food prices had in recent years been rather

higher in January and February during Chinese New Year than in the preceding

December.

"In some years also these price rises have continued into March,

This happened to a modest extent in 1969 and to a greater degree in 1970 and

it happened again this year," he said.

As three quarters of the food consumed by Hong Kong was imported,

he noted, "we are subject to the prices charged by our suppliers."

He added, however, "there is no real evidence to suggest that either

wholesale or retail margins on the sale of food in Hong Kong have increased,"

The price of food, he said, had been increasing on the world market

and Hong Kong could not insulate itself from this trend.

While prices of foodstuffs imported from China had also gone up in line

with the world trend, "there is no sign that they have risen inordinately."

"In fact, they have increased less than prices from other sources

and for the most part are still significantly lower than are prices of similar

foodstuffs from other countries."

/In general,