XN000022-1979-01-19 — Page 3

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FRIDAY, JANUARY 19, 1979

HOWEVER, SIR MURRAY WARNED THAT THOUGH WE SHOULD BE SAFE ON FACT, FANCY AND RUMOUR AMONG PROTECTIONIST LOBBIES OR COMPETITORS ABROAD COULD BE DAMAGING.

+SO EXPORTERS MUST BE PARTICULARLY CAREFUL TO DO NOTHING WHICH COULD GIVE GROUNDS FOR SUCH RUMOURS AND, FOR OUR PART, WE MUST BE ALERT TO ANY ALLEGATIONS, HOWEVER INFORMAL AND UNFOUNDED, AND REBUT THEM AS SOON AS THEY ARE MADE,+ SIR MURRAY STRESSED.

+TO SUM UP, WE ARE IN THE PRESENCE OF NEW DEVELOPMENTS OF CONSIDERABLE SIGNIFICANCE THAT COULD AFFECT THE EXTENT OF OUR RELATIONS WITH THE PEOPLE'S REPUBLIC OF CHINA IN RESPECT OF TRADE, INDUSTRY, TOURISM, COMMUNICATIONS AND FINANCE.

+THESE POSSIBILITIES ARE THE SUBJECT OF MUCH RUMOUR AND SPECULATION, AND THE DIMENSIONS OF THE POSSIBILITIES, OPPORTUNITIES, AND EVEN PROBLEMS, ARE LIKELY TO EMERGE ONLY GRADUALLY AS THE MONTHS GO BY.

+MEANWHILE, THERE ARE OBVIOUS ADVANTAGES IN THE DEVELOPMENTS THAT HAVE ALREADY TAKEN PLACE OR WHICH WE MAY EXPECT. THE FRIENDLY AND CONSTRUCTIVE SPIRIT BEHIND THEM IS A SOURCE OF CONFIDENCE.

+MOREOVER PEOPLE HERE WELCOME THE MODERNISATION PROGRAMME AND WELCOME THE PROSPECT OF BEING ABLE TO PLAY A PART IN IT, SIR MURRAY SAID.

ON HONG KONG'S TRADING PROSPECTS, SIR MURRAY SAID THESE WELCOME AND ARRESTING DEVELOPMENTS COULD NOT 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 MARKETS.

+AS USUAL THE SKY IS NOT FREE OF CLOUDS. THERE IS THE LIMITATION IMPOSED ON OUR TRADE IN TEXTILES AND CLOTHING. WE ARE ALREADY FEELING THE CONSEQUENCES OF THE REDUCED OPPORTUNITIES FOR GROWTH IN THE AGREEMENTS WE WERE FORCED TO CONCLUDE IN 1977.

→THE CONTINUED HIGH RATE OF UNEMPLOYMENT IN OUR PRINCIPAL MARKETS WILL RETAIN POLITICAL PRESSURES ON GOVERNMENTS TO RESTRICT IMPORTS HOWEVER UNFAIR AND MISGUIDED THAT MAY BE.

+MOREOVER OUR EXPORT MARKETS MUST ABSORB THE EFFECTS OF THE INCREASES IN OIL PRICES ANNOUNCED BY THE OPEC COUNTRIES. LESS SPECIFICALLY, BUT CERTAINLY IN OUR MINDS IS THE SITUATIONS IN IRAN, THE MIDDLE EAST AND RHODESIA.

+NEVERTHELESS, THE ENCOURAGING FACT IS THAT ORDER BOOKS AND IMPORTS OF RAW MATERIALS AT THE END OF 1978 SUGGEST THAT PROSPECTS FOR THE FIRST HALF OF 1979 ARE REASONABLY GOOD THOUGH IT IS TOO EARLY TO SAY WHAT THE LATTER HALF WILL BRING US, SIR MURRAY SAID.

/SIR MURRAY