XN000022-1979-01-19 — Page 25

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Prospects for 1979

Welcome and arresting as these developments are they cannot

change the basic fact of our economic life, that Hong Kong must earn

its living largely by exporting.

With 58 per cent of our domestic exports going to the United

States, the Federal Republic of Germany and the United Kingdom, our

prospects for 1979 are going to depend very much on what happens in

these three markets.

The prospects in the United States have been consistently

talked and written down by commentators, and just as consistently the

signs of recession have failed to appear. However, it must be assumed

that with the level of interest rates prevailing and likely to prevail,

prospects for this year as a whole may not be as good as last.

But in contrast the prospects for the German economy and the

United Kingdon seem reasonably good.

There is the

As usual the sky is not free of clouds.

limitation imposed on our trade in textiles and clothing.

We are

already feeling the consequences of the reduced opportunities for

growth and flexibility in the Agreements we were forced to conclude

in 1977.

The continued high rate of unemployment in our principal markets

will retain political pressure on Governments to restrict imports

however unfair and misguided that may be.

Moreover our