XN000022-1982-10-28 — Page 13

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THURSDAY, OCTOBER 28, 1982

MANUFACTURERS SEE RECOVERY SIGNS

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THE CONSENSUS AMONG LOCAL MANUFACTURERS IS THAT THE WORST IS BEHIND US AND THAT THE SIGNS LOOK GOOD FOR A SPEEDY ECONOMIC RECOVERY, THE HON STEPHEN CHEONG TOLD THE LEGISLATIVE COUNCIL TODAY (THURSDAY).

HE POINTED OUT THAT ECONOMISTS IN THE UNITED STATES APPEAR TO BE EXPECTING A POSITIVE GROWTH RATE FOR ITS ECONOMY IN THE FOURTH QUARTER OF THIS YEAR WHILE THE LATEST LITERATURE SUGGESTS THAT THE US GOVERNMENT BELIEVES SOME EASING OF MONETARY RESTRAINT IS POSSIBLE WITHOUT REFUELLING INFLATION.

CITING STATISTICS, MR CHEONG SAID THAT TOTAL RETAIL SALES IN THE US LAST MONTH INCREASED BY ONE PER CENT, OR NEARLY US$1 BILLION IN MONEY TERMS, OVER THE PREVIOUS MONTH.

+THIS IS ALL THE MORE SIGNIFICANT BECAUSE RETAIL SALES OF LIGHT CONSUMER GOODS - WHICH WE MANUFACTURE AND ARE SKILFUL IN MARKETING - MUST HAVE PICKED UP BY MORE THAN ONE PER CENT,

+GIVEN, ALSO, THAT THE PROCESS OF DE-STOCKING OF THE TYPE OF GOODS WE SUPPLY TO THE US IS VIRTUALLY COMPLETED, DEMAND FOR OUR EXPORTS IN OUR MOST IMPORTANT MARKET IS BEGINNING TO STRENGTHEN,

THE +EQUALLY ENCOURAGING SIGNS ARE DEVELOPING IN EUROPE SECOND MOST IMPORTANT GROUP OF MARKETS FOR OUR MANUFACTURERS, + HE STATED.

AS REGARDS HONG KONG, MR CHEONG NOTED THAT PRODUCTION CAPACITY IN TERMS OF PLANT AND EQUIPMENT HAS NOT BEEN SUBSTANTIALLY RUN DOWN.

+IN OTHER WORDS, THE SIGNS LOOK GOOD FOR A SPEEDY RECOVERY IN THE MANUFACTURING AND EXPORT SECTORS OF THE ECONOMY, AND THERE IS EVERY INDICATION THAT THE MAJORITY OF MANUFACTURERS AND WORKERS ARE BEHAVING RESPONSIBLY AND SENSIBLY IN THE EXPECTATION OF BETTER THINGS TO COME.+

AGAINST THIS BACKGROUND, MR CHEONG URGED:

*

DO NOT OVER-REACT TO ISOLATED BUT OVER-DRAMATISED INCIDENTS OF BUSINESS FAILURE BY IMMEDIATELY INTRODUCING A GOVERNMENT-FUNDED WAGES COMPENSATION FUND.

* THE ENFORCEMENT AGENCIES SHOULD NOT APPLY

ENVIRONMENTAL PROTECTION LEGISLATION IN SUCH A WAY AS TO DISCOURAGE MANUFACTURERS FROM

INVESTING IN NEW PLANT AND EQUIPMENT.

* MONITOR CLOSELY THE HEALTH OF HONG KONG'S

MANUFACTURING INDUSTRY AND GUARD AGAINST ANY FURTHER SUBSTANTIAL EROSION OF ITS COMPETITIVE COST STRUCTURE.

*

THE GOVERNMENT SHOULD TAKE SOME ACTION TO PREVENT PROPERTY PRICES FROM DRIFTING DOWN MUCH FURTHER, OTHERWISE IT WOULD HAVE THE DISASTROUS EFFECT OF UNDERMINING THE FOUNDATION OF HONG KONG'S FINANCIAL SECTOR.

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