XN000022-1980-10-01 — Page 3

WEDNESDAY, OCTOBER 1, 1980

OUTLOOK GENERALLY ENCOURAGING

BUT IMMIGRATION POSES SERIOUS THREAT

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THE OUTLOOK FOR HONG KONG IS GENERALLY ENCOURAGING, THOUGH THE WAR IN THE PERSIAN GULF AND THE PROBLEM OF IMMIGRATION ARE WORRYING FEATURES, THE GOVERNOR, SIR MURRAY MACLEHOSE SAID TODAY.

IN HIS ANNUAL REVIEW AT THE OPENING SESSION OF THE LEGISLATIVE COUNCIL, SIR MURRAY POINTED TO A SURPRISINGLY BUOYANT AND BALANCED ECONOMY, FINE WORK BY OUR INDUSTRIALISTS, EXPORTERS AND BUILDERS, AND SOLID PROGRESS IN OUR SOCIAL PROGRAMMES COUPLED WITH BUDGETARY STABILITY.

+THESE TAKEN TOGETHER WITH OUR FRIENDLY RELATIONS WITH CHINA AND CONTINUING SUPPORT AND INTEREST FROM THE UNITED KINGDOM FORM A GOOD BASIS FROM WHICH TO FACE THE FUTURE, HE SAID.

HE WAS CONCERNED, HOWEVER, OVER THE IMPLICATIONS OF THE WAR IN THE GULF, AND THE INSIDUOUS THREAT THE PROBLEM OF IMMIGRATION WAS BECOMING TO OUR ECONOMIC AND SOCIAL WELL-BEING.

HE ALSO DREW ATTENTION TO THE NEED TO CONSIDER WHETHER THE SPEED OF PRODUCTION WAS ADEQUATE FOR THE NEEDS OF THE DECADE TO COME.

+WHILE I SEE THE SITUATION DEVELOPING IN CHINA AND IN THE SOUTH WEST PACIFIC REGION TO BE HIGHLY FAVOURABLE TO HONG KONG, AND TO HOLD A PROSPECT OF BRIGHT OPPORTUNITIES, I AM CONCERNED THAT WE SHOULD HAVE THE FACILITIES THAT IS TO SAY THE LAND FOR NEW INDUSTRY, THE ROADS, THE HOUSING THAT WILL ENSURE THAT THE OPPORTUNITIES CAN BE GRASPED BY HONG KONG,+ HE SAID.

SIR MURRAY BEGAN HIS WIDE-RANGING ADDRESS WITH A REVIEW OF THE ECONOMY WHICH HE SUMMED UP AS NOT AT ALL BAD+ AND THAT OF OUR BUDGETARY POSITION DISTINCTLY GOOD+.

EXPORT PROSPECTS IN THE IMMEDIATE FUTURE, HE SAID, ARE MUCH BETTER THAN ONE MIGHT EXPECT FROM THE OTHERWISE POOR PERFORMANCE OF THE ECONOMIES OF OUR MAIN MARKETS.

BUT HE CAUTIONED THAT THE WAR IN THE GULF AND THE IMPOSSIBILITY OF ASSESSING THE EFFECT IT WOULD HAVE ON OIL SUPPLIES AND PRICES AND THE ECONOMIES OF OUR TRADING PARTNERS, MADE THE FUTURE DIFFICULT TO FORECAST AT THIS TIME.

ALTHOUGH THE LONGER-TERM PROSPECTS FOR GROWTH OF THE ECONOMY REMAIN GOOD, SIR MURRAY SAID IMMIGRATION THREATENED IT IN TWO WAYS.

FIRSTLY, THE DILUTION OF THE LABOUR MARKET WAS REDUCING THE GROWTH OF INDIVIDUAL INCOMES. THIS IS GROSSLY UNFAIR TO THE INDIVIDUAL WORKER.+

SECONDLY, THOUGH IN THE SHORT-TERM IT MAY BE PENEFICIAL TO SOME EMPLOYERS, IT WAS EXTREMELY BAD IN THE LONG-TERM BECAUSE IT REMOVED THE INCENTIVE FOR HIGHER PRODUCTIVITY AND MOVEMENT INTO MORE SOPHISTICATED AND CAPITAL INTENSIVE PRODUCTION.

/+IT IS