XN000022-1981-10-29 — Page 9

8

THURSDAY, OCTOBER 29, 1981

CONCERN OVER MANUFACTURING INDUSTRY

*****

THE HON WONG PO-YAN EXPRESSED GRAVE CONCERN OVER THE PROBLEMS OF HONG KONG'S MANUFACTURING INDUSTRY AND ITS EFFECT ON THE WEAKNESS OF THE HONG KONG DOLLAR.

SPEAKING AT THE LEGISLATIVE COUNCIL, HE SAID THE PERSISTENT WIDENING OF OUR VISIBLE TRADE +GAP+ IS THE MOST FUNDAMENTAL SINGLE FACTOR FOR THE DECLINING EXCHANGE VALUE OF OUR DOLLAR.

+DISTINCT FROM SUCH OTHER FACTORS AS A TEMPORARY IN-FLOW OR OUT-FLOW OF FUNDS OR SPECULATIONS IN FOREIGN EXCHANGE, WHICH MAY AFFECT THE HONG KONG DOLLAR WITHIN A SPECIFIC PERIOD, THE WIDENING TRADE GAP HAS A CONTINUOUS AND FAR-REACHING EFFECT.

+ IT IS NOT ILLOGICAL TO SAY, AND BELIEVE WE ALL KNOW, THAT THE LONG-TERM SOLUTION FOR STIFFENING OUR DOLLAR IS TO NARROW THIS GAP - BY STRENGTHENING THE COMPETITIVENESS OF OUR EXPORT- ORIENTATED FOREIGN-EXCHANGE-EARNING MANUFACTURING INDUSTRY,+ HE SAID.

QUOTING STATISTICS, MR WONG SAID THE +GAPS+ IN THE FIRST HALF OF THIS YEAR WERE 16 PER CENT COMPARED WITH 14.7 PER CENT FOR THE SAME PERIOD LAST YEAR A DIFFERENCE OF 1.3 PER CENT OR AN

INCREASE OF 8.8 PER CENT IN PERCENTAGE TERMS.

IN DOLLAR TERMS, THE +GAPS IN THE SAME HALF-YEAR PER JOD WERE $10 480 MILLION AGAINST $7 614 MILLION, AN INCREASE OF 37.6 PER CENT.

HE NOTED THAT ACCORDING TO PRESS REPORTS, JAPANESE IMPORTS IN A RECENT MONTH INCREASED BY ONE PER CENT ONLY WHILE THEIR EXPORTS INCREASED BY 12 PER CENT COMPARED WITH THE SAME MONTH LAST YEAR.

+WE CANNOT AND MUST NOT IGNORE THE POSSIBLE EFFECTS OF OUR PERSISTENTLY WIDENING VISIBLE TRADE 'GAP',+ HE STRESSED.

+WE HAVE TO DO WHATEVER WE CAN TO INCREASE OUR EXPORTS, IF WE CANNOT REDUCE IMPORTS BY CERTAIN EFFECTIVE MEASURES BECAUSE OF OUR POSITIVE NON-INTERVENTION ECONOMIC POLICY.+

MR WONG POINTED OUT THAT THE STATE AND SURVIVAL OF THE LOCAL MANUFACTURING INDUSTRY WHICH EMPLOYS SOME 42 PER CENT OF A 2.4 MILLION WORKFORCE, HAS DIRECT OR INDIRECT BEARINGS ON THE ENTIRE ECONOMY, AND HENCE THE LIVELIHOOD OF EACH AND EVERY ONE

IN HONG KONG.

HE SAID IN THE LAST FEW YEARS HONG KONG HAD ABSORBED HUNDREDS OF THOUSANDS OF NEW IMMIGRANTS, A VERY HIGH PERCENTAGE OF THEM ARE WITHIN THE WORKING AGE RANGE.

BUT THEY ARE MOSTLY UNSKILLED WORKERS AND MANY OF THEM CAN ONLY BE EMPLOYED IN THE COMPARATIVELY LESS SOPHISTICATED INDUSTRIES.

/+THEREFORE, THEN