XN000022-1979-03-28 — Page 19

WEDNESDAY, MARCH 28, 1979

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MR. LI ADDED THAT IT WOULD BE USEFUL FOR THE PURPOSE OF INDICATIVE PLANNING BY THE ENTIRE BUSINESS COMMUNITY IF THE FINANCIAL SECRETARY WOULD STATE WHAT RATE OF MONEY SUPPLY GROWTH IN, SAY, M2 TERMS, IS IMPLICIT IN HIS FORECAST OF GDP GROWTH IN 1979, AND WHAT RATE OF M2 GROWTH HE WOULD REGARD AS MOST DESIRABLE IN TERMS OF AVERTING OUR VERY REAL THREAT OF INFLATION.

CONCERNED THAT HIGHER INTEREST RATES APPLIED GENERALLY WILL ADVERSELY AFFECT INDUSTRIES, MR. LI FURTHER ASKED THE FINANCIAL SECRETARY TO SET UP A MONETARY AUTHORITY TO REGULATE MONEY SUPPLY IN THE ABSENCE OF A CENTRAL BANK.

HE THOUGHT THE BEST OPTION IS THE CREATION OF AN INDUSTRIAL/DEVELOPMENT BANK OR INDUSTRIAL/DEVELOPMENT FINANCE CORPORATION WHICH WOULD ALLOW SHORT, MEDIUM AND LONG-TERM LOANS FOR INDUSTRIAL AND TRADE DEVELOPMENT PROJECTS AT PREFERENTIAL RATES OF INTEREST.

SUCH AN INSTITUTION HAS THE ADVANTAGE OF ALLOWING INDUSTRY TO TAKE FULL ADVANTAGE OF THE FINANCIAL SECRETARY'S PROPOSED +POOLING SYSTEM FOR DEPRECIATION ALLOWANCES AND COULD PROVIDE A USEFUL MEANS FOR EMPLOYING PART OF HONG KONG'S FISCAL RESERVES, HE EXPLAINED.

HE SAID THIS YEAR'S BUDGET IS HISTORIC IN THAT THE EMPHASIS SLOWING DOWN THE GROWTH RATE OF GOVERNMENT EXPENDITURE SO AS TO MINIMISE THE DISTORTIONS WITHIN INDIVIDUAL MARKETS, AND CONSTRAINING THE GROWTH RATE OF PRIVATE DOMESTIC DEMAND BY REDUCING THE GROWTH RATE OF THE MONEY SUPPLY IN THE HANDS OF THE NON-BANK PRIVATE SECTOR

IS PRECEDENT-SETTING,

HE FELT RELIEVED, HOWEVER, THAT THIS WOULD BE DONE IN SUCH A MANNER THAT EXPENDITURE ON SOCIAL SERVICES AND APPROVED PROJECTS WILL NOT BE AFFECTED.

WATER SUPPLY CONTRACT SIGNED

******

AN $82.8 MILLION CONTRACT FOR PIPELINES AND TUNNELS IN THE SECOND STAGE OF THE SCHEME TO TRANSPORT ADDITIONAL CHINESE WATER FROM THE RIVER INDUS PUMPING STATION TO PLOVER COVE WAS SIGNED TODAY (WEDNESDAY) BY THE WATER SUPPLIES DEPARTMENT.

THE CONTRACT, WORTH $82,816,657, WAS AWARDED TO MITSUI CONSTRUCTION CO. LTD.

THE JOB INVOLVES:

*

2,040 METRES OF STEEL PIPELINE, 2,020 MM IN DIAMETER, FROM THE RIVER INDUS STATION TO TOP HILL IN WA SHAN.

/* 2,377 METRES.............