XN000022-1978-03-29 — Page 2

WEDNESDAY, MARCH 29, 1978

SPEED UP DEVELOPMENT OF EXPORT-ORIENTED INDUSTRIES URGES SIR SZE-YUEN

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SENIOR UNOFFICIAL MEMBER OF THE LEGISLATIVE COUNCIL, THE HON. SIR SZE-YUEN CHUNG POINTED OUT THAT HONG KONG MUST EXPORT TO LIVE AND CANNOT RELY ON DOMESTIC ACTIVITIES, AS IT. SEEMS WE ARE TENDING TO DO NOW, TO RAISE OUR GROSS DOMESTIC PRODUCT.

IN AN ANALYSIS OF OUR ECONOMIC DEVELOPMENT HE GAVE IN TODAY'S RESUMED BUDGET DEBATE, SIR SZE-YUEN SAID OUR GDP GROWTH RATES, DESPITE THE INFLATIONARY EFFECT IN THE EARLY 1970'S, WERE HIGH BY ANY STANDARDS.

AT CURRENT MARKET PRICES IT ROSE ALMOST 200 PER CENT OR BY AN AVERAGE OF NEARLY 17 PER CENT ANNUALLY FROM $18,670 MILLION IN 1970 TO $54,444 MILLION IN 1977. ITS PER CAPITA RATE ALSO ROSE BY AN AVERAGE OF 14 PER CENT ANNUALLY FROM $4,716 TO $12,100.

HE NOTED SIGNS OF CONCERN HOWEVER OVER THE CHANGE OF IMPORTANCE IN THE COMPONENTS OF OUR GDP.

OUR EXPORT-ORIENTED MANUFACTURING SECTOR CONTRIBUTED OVER 31 PER CENT OF THE TOTAL GDP IN 1970. IT WAS ONLY 26.6 PER CENT IN 1975 AND WENT DOWN FURTHER, POSSIBLY TO ABOUT 24 PER CENT LAST YEAR. IN ADDITION, THE SPENDING OF LOCAL PEOPLE OUTS IDE HONG KONG WAS RISING MUCH FASTER THAN THE RECEIPT FROM INCOMING TOURISTS. WHILE EVERY DOLLAR SPENT ABROAD IS A NET OUTFLOW OF FUNDS, ONLY A SMALL PORTION OF THE AVERAGE TOURIST DOLLAR IS RETAINED BY US.

ON THE OTHER HAND, SIR SZE-YUEN SAID, THE CONTRIBUTION TO OUR GDP FROM DOMESTIC ACTIVITIES, PARTICULARLY FROM CIVIL CONSTRUCTION AND REAL ESTATE, HAS BEEN AND IS STILL RISING QUITE FAST.

GIVEN HONG KONG'S LACK OF NATURAL MATERIAL RESOURCES AND SUFFICIENT ARABLE LAND, RAISING OUR GDP THIS WAY IS NOT A LONG-TERM POSSIBILITY. BESIDES, THE INCREASING CIVIL CONSTRUCTION WORK OF THE MTR IS FINANCED FROM BORROWED FUNDS, EVERY DOLLAR OF WHICH HAS TO BE REPAID, HE SAID.

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IN VIEW OF THESE CHANGES, SIR SZE-YUEN SAID THERE IS AN URGENT NEED TO ACCELERATE THE DEVELOPMENT OF OUR EXPORT-ORIENTED INDUSTRIES AND SERVICES AND HE ASKED WHETHER THE GOVERNMENT SHOULD NOT BE INVOLVED MORE ACTIVELY IN THIS DEVELOPMENT.

HE SAID THERE IS A GROWING BODY OF LOCAL OPINION THAT WE IN HONG KONG SHOULD NOT IGNORE THE FACT THAT SUCH INVOLVEMENT IS A MAJOR REASON FOR THE SUCCESSFUL INDUSTRIAL DEVELOPMENT IN JAPAN AND MORE RECENTLY IN SOUTH KOREA AND TAIWAN.

QUOTING THE EXAMPLE OF THE ELECTRONIC INDUSTRY IN SOUTH KOREA, SIR SZE-YUEN SAID THEIR EXPORTS IN 1972 WERE MERELY HALF OF OURS, WITHIN FIVE YEARS, THEIR EXPORTS WENT UP SEVEN TIMES AND OVERTOOK BY 50 PER CENT OURS WHICH HAD ONLY INCREASED BY ONE AND A QUARTER TIMES.

/IN THE WAY