XN000022-1975-03-20 — Page 15

THURSDAY, MARCH 20, 1975

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NEED FOR MORE INDUSTRIAL PROMOTION

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THE HON. FRANCIS TIEN TODAY CALLED FOR A REAPPRAISAL OF HONG KONG'S APPROACH TO INDUSTRIAL INVESTMENT PROMOTION AND URGED THE GOVERNMENT NOT TO BE STRINGENT WITH FUNDS FOR THIS PURPOSE.

THE 'MEAGRE' $200,000 EARMARKED FOR PROMOTING INDUSTRIAL DEVELOPMENT AND INVESTMENT, HE SAID, IS TOTALLY INADEQUATE. PERSONALLY FELT THAT A SUM TEN TIMES THIS WOULD BE MONEY WELL SPENT.

+INDUSTRIAL PROMOTION IS AN EXPENSIVE BUSINESS, BUT THE RETURNS CAN BE VERY HANDSOME, HE ADDED.

HE

IN THE LONG TERM, HE SAID, THE ONLY WAY THE GOVERNMENT COULD OBTAIN MORE MONEY WAS BY ENSURING THAT ECONOMIC ACTIVITIES WERE STEPPED UP AND HONG KONG GOODS EARNED MORE. IT WAS VITALLY IMPORTANT THEREFORE TO INVEST IN INDUSTRIAL PROMOTION SO AS TO WIDEN THE RANGE OF PRODUCTS SO THAT WHEN THE ECONOMIC CLIMATE IMPROVED HONG KONG WOULD BE IN A GOOD POSITION TO TAKE ADVANTAGE OF 17.

MR. TIEN BLAMED FLOATING OF THE HONG KONG DOLLAR AS A MAJOR CONTRIBUTING FACTOR IN THE DOWN TURN OF HONG KONG'S TRADING PERFORMANCE. AND HE HOPED THAT A FIXED PARITY COULD BE SET SOON, PREFERABLY AT A LEVEL WHICH WOULD NOT ADVERSELY AFFECT HONG KONG INDUSTRIES' COMPETITIVENESS IN FOREIGN MARKETS.

IN THE SHORTER TERM, HE FELT THAT SOME MEASURE SHOULD BE ADOPTED TO STOP THE INFLOW AND ENCOURAGE THE OUTFLOW OF UNWANTED U.S. DOLLARS. THIS, HE SUGGESTED, COULD BE ACHIEVED BY LOWERING THE PRIME LENDING RATE FOR INDUSTRY STILL FURTHER.

+A FURTHER REDUCTION IN LENDING RATES, AT LEAST FOR THE INDUSTRIAL SECTOR, WOULD ALSO GIVE SOME ALLEVIATION TO THIS HARD-PRESSED SECTOR BY PROVIDING THEM WITH A CHEAPER SUPPLY OF CASH, HE ADDED.

MR. TIEN ALSO URGED THE GOVERNMENT TO PRESS FOR EARLY REMOVAL OF EXTRA TARIFF QUOTAS IMPOSED RECENTLY BY AUSTRALIA ON A WIDE RANGE OF ADDITIONAL TEXTILE AND GARMENT IMPORT ITEMS OF WHICH HONG KONG WAS EITHER THE PRINCIPAL, OR ONE OF THE MAJOR SUPPLIERS. THE RESTRICTIONS WERE INTRODUCED OUTSIDE THE SCOPE OF THE INTERNATIONAL ARRANGEMENT REGARDING TRADE IN TEXTILES.

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ON THE EUROPEAN FRONT MR. TIEN WAS HOPEFUL THAT THE RECENT VISIT OF AN EEC DELEGATION WOULD LEAD TO THE REDUCTION AND EVENTUAL REMOVAL OF DISCRIMINATION AGAINST HONG KONG.

/HOWEVER,

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