XN000022-1978-11-21 — Page 2

TUESDAY, NOVEMBER 21, 1978

GOVERNOR CALLS FOR MORE JAPANESE INVESTMENT

AND BETTER TRADE BALANCE

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HONG KONG'S ECONOMIC MISSION TO JAPAN IS HOPING TO ATTRACT GREATER JAPANESE INVESTMENT IN HONG KONG'S INDUSTRY AND IS LOOKING FOR WAYS TO BOOST SALES OF HONG KONG PRODUCTS TO JAPAN.

THE AIMS OF THE MISSION WERE OUTLINED BY THE GOVERNOR, SIR MURRAY MACLEHOSE, WHEN HE ADDRESSED A LUNCHEON HOSTED BY THE FEDERATION OF ECONOMIC ORGANISATIONS, THE KIEDANREN, IN TOKYO TODAY (TUESDAY).

THE BALANCE OF TRADE IMPORTS FROM JAPAN WERE

LAST YEAR THEY WERE EIGHT

+WE WOULD LIKE TO SEE SOME CHANGE IN BETWEEN JAPAN AND HONG KONG. IN 1973 OUR FIVE AND A HALF TIMES OUR EXPORTS TO YOU. TIMES AS GREAT. THIS YEAR IT LOOKS AS THOUGH THE BALANCE WILL BE NINE TO ONE IN YOUR FAVOUR.

SIR MURRAY POINTED OUT THAT WHILE ABOUT A QUARTER OF OUR IMPORTS COMES FROM JAPAN IT IN TURN TOOK ONLY FOUR PER CENT OF HONG KONG'S EXPORTS.

HOWEVER SIR MURRAY ADDED: +WE ARE DELIGHTED THAT JAPAN HAS LONG BEEN A MAJOR SOURCE OF SEMI-MANUFACTURES, CONSUMER GOODS AND CAPITAL EQUIPMENT FOR HONG KONG AND THAT SO MANY JAPANESE LIVE AND WORK THERE.+

HE SAID THAT HONG KONG WAS AN OPEN MARKET AND JAPANESE EXPORTERS HAVE COMPETED VERY SUCCESSFULLY WITH OTHER SUPPLIERS TO HONG KONG'S ADVANTAGE.

+BUT WHY HAS THERE BEEN SO LITTLE TRADE IN THE OTHER DIRECTION? HONG KONG'S EXPORTERS HAVE BEEN SUCCESSFUL IN FINDING MARKETS ALL OVER THE WORLD. WHY HAVE THEY SO FAR FAILED HERE? THE FACT IS THAT DESPITE THE REMOVAL OF NEARLY ALL YOUR FORMAL IMPORT RESTRICTIONS OUR EXPORTERS FIND THE JAPANESE MARKET VERY DIFFICULT TO PENETRATE.+

SIR MURRAY NOTED THAT COUNTRIES WHERE JAPANESE INVESTMENT IS CONCENTRATED SHOW A MUCH BETTER IMPORT PERFORMANCE IN JAPAN THAN HONG KONG.

+ IF IT IS THEREFORE A FACT THAT EXPORT PERFORMANCE TO THE JAPANESE MARKET IS LINKED TO THE LEVEL OF JAPANESE INVESTMENT IN THE EXPORTING COUNTRY, THEN WE VERY MUCH HOPE THAT THERE WILL BE MORE DIRECT INVOLVEMENT BY JAPAN IN THE HONG KONG INDUSTRIAL SCENE.+

THE GOVERNOR SUGGESTED THAT INVESTMENT OR JOINT VENTURES IN HONG KONG COULD BE PROFITABLE TO JAPAN, WOULD ASSIST HONG KONG'S DEVELOPMENT AND TEND TO ACHIEVE A BETTER BALANCE IN TRADE. HE SAID THE MISSION WAS THEREFORE SEEKING THE CO-OPERATION OF JAPANESE INDUSTRY AND THE ENCOURAGEMENT OF THE JAPANESE GOVERNMENT.

+ IN CONSIDERING MY SUGGESTIONS FOR THE EXPANSION OF INVESTMENT AND TRADE. THE EXCELLENT STATE OF ANGLO-CHINESE RELATIONS OVER HONG KONG AND THE CONFIDENCE CREATED IN HONG KONG BY FRIENDLY RELATIONS WITH CHINA, SHOULD BE RELEVANT TO THE JUDGEMENT OF JAPANESE

BUSINESSMEN. INVESTMENT.+

I AM SURE THAT HONG KONG HAS NEVER BEEN A SOUNDER

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