XN000022-1975-08-27 — Page 2

WEDNESDAY, AUGUST 27, 1975

EFFECTS OF WORLD RECESSION ON HONG KONG'S ECONOMY ECONOMIC REPORT INDICATES IMPROVING SITUATION ******

THE EFFECT OF THE WORLD RECESSION ON HONG KONG'S ECONOMY IS REVIEWED IN DETAIL IN THE LATEST EDITION OF THE ECONOMIC REPORT.

THE REPORT, WHICH COVERS MAINLY EVENTS IN THE FIRST HALF OF 1975, SAYS THE ECONOMIES OF THE MAIN INDUSTRIALISED COUNTRIES ARE EXPERIENCING THEIR HOST SEVERE RECESSION SINCE THE VAR AND THAT THESE DEVELOPMENTS HAVE +EXERCISED A DOMINANT INFLUENCE OVER HONG KONG'S ECONOMY+.

IT SHOWS THAT THE VALUE OF DOMESTIC EXPORTS IN THE FIRST SIX MONTHS OF THIS YEAR DROPPED BY 15 PER CENT COMPARED WITH THE SAME PERIOD LAST YEAR.

IN MONEY TERMS DOMESTIC EXPORTS WERE WORTH $9,804 MILLION, A DROP OF $1,668 MILLION FROM THE FIRST SIX MONTHS OF 1974.

HOWEVER, THE REPORT POINTS OUT THAT THE QUANTITY OF GOODS EXPORTED DURING THE SAME PERIOD FELL BY A SMALLER PERCENTAGE. IN THE FIRST QUARTER THE DROP WAS 10 PER CENT. THIS REFLECTS THE FACT THAT EXPORT PRICES FELL IN THE PERIOD UNDER REVIEW, FOLLOWING RAPID INCREASES IN 1973 AND THE FIRST HALF OF 1974.

THE REPORT INDICATES THAT IN THE FIRST QUARTER OF THIS YEAR, EXPORT PRICES WERE FIVE PER CENT DOWN ON A YEAR EARLIER.

ALTHOUGH THE VALUE OF IMPORTS ALSO DECLINED THIS YEAR, BY 13 PER CENT IN THE FIRST QUARTER AND 20 PER CENT IN THE SECOND QUARTER COMPARED WITH A YEAR EARLIER, IN QUANTITY TERMS THE DECLINE WAS SMALLER - AGAIN REFLECTING LOVER IMPORT PRICES.

DURING THE FIRST SIX MONTHS IMPORTS WERE VALUED AT $14,819 MILLION - DOWN $3,020 MILLION ON THE SAME PERIOD LAST YEAR. RE-EXPORTS WERE VALUED AT $3,213 MILLION, A DECLINE OF $405 MILLION,

THE REPORT NOTES THAT TEXTILES, PLASTIC PRODUCTS AND ELECTRONICS ARE THE PRODUCTS WHICH HAVE DEEN MOST AFFECTED BY THE RECESSION. ON THE OTHER HAND, IN THE FIRST QUARTER OF THIS YEAR, EXPORTS OF CLOTHING, IN QUANTITY TERMS, RECORDED GOOD GAINS WHILE THERE WERE ALSO INCREASES IN THE EXPORTS OF WATCHES AND CLOCKS.

THE REPORT ALSO POINTS OUT THAT, AS A RESULT OF THE WORLD RECESSION, THE HONG KONG ECONOMY WAS WORKING AT VELL DELOU FULL CAPACITY IN THE FIRST HALF OF THE YEAR.

IN THE LABOUR MARKET, EMPLOYMENT (MOST NOTABLY IN MANUFACTURING) WAS CONSIDERABLY BELOW THE LEVEL OF A YEAR EARLIER, WITH UNEMPLOYMENT AND UNDER-EMPLOYMENT HIGHER.

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