WEDNESDAY, JANUARY 11, 1964
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THE GOVERNOR SAID THAT RECENT PROBLEMS WHICH HAD ARISEN IN HONG KONG STARTED IN 1982 AFTER A DECADE OF EXPANSION. THERE IS NO PLACE IN THE WORLD MORE EXPOSED TO WORLD TRADE TRENDS, HE SAID. IN ADDITION THE EFFECTS OF A SUBSTANTIAL FALL IN PROPERTY PRICES BECAME APPARENT.
+THERE ARE THOSE WHO WILL TELL YOU THAT THE COLLAPSE OF THOSE PRICES BEGAN IN THE AUTUMN OF 1982 WITH THE COMMENCEMENT OF THE TALKS IN PEK ING. IT DID NOT.+
SIR EDWARD SAID THAT THE MAIN CAUSE WAS OVERSUPPLY AND HIGHLY INFLATED PRICES. +THE BOOM WAS BOUND TO BUST, HE ADDED. IN ADDITION THE INTERNATIONAL BANK ING COMMUNITY BECAME GENERALLY MORE CAUTIOUS ABOUT OVERSEAS EXPOSURE. THEN CAME THE NEW ELEMENT THE REAL ISATION THAT 1997 WAS ONLY 15 YEARS AWAY.
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THE YEAR 1983 BEGAN IN A CALMER ATMOSPHERE BUT THE SECOND HALF BROUGHT PROBLEMS. THERE WERE RUMOURS OF TROUBLE AMONG SOME FINANCIAL INSTITUTIONS, SOME COMPANIES WERE IN DIFFICULTY, THE EXCHANGE VALUE OF THE HONG KONG DOLLAR DECLINED. +BUT A GREAT DEAL WAS ATTRIBUTABLE TO POLITICAL NERVOUSNESS ABOUT THE STATE OF THE TALKS IN PEKING, SAID SIR EDWARD.
THE FALL IN THE HK DOLLAR WAS NOT CAUSED BY ECONOMIC FACTORS ALONE AND IT WAS THEREFORE DECIDED TO LINK THE RATE OF THE CURRENCY TO THE US CURRENCY VIA THE NOTE ISSUING MECHANISM, LEAVING INTEREST RATES AND ARBITRAGE TO KEEP THE OPEN MARKET RATE CLOSE TO IT.
TURNING TO THE STRENGTHS OF HONG KONG SIR EDWARD SAID THOUGH THE DIFFICULTIES HAVE BEEN AND ARE REAL, RELATIVELY THE PICTURE IS NOTHING LIKE AS BLEAK. THERE ARE MANY PLACES IN THE WORLD WHICH HAVE HAD AS DIFFICULT, IF NOT MORE DIFFICULT, TIMES THAN HONG KONG HAS HAD AND THERE ARE FEW WHICH HAVE THE INNATE STRENGTHS OF THE COMMUNITY OF HONG KONG WITH WHICH TO CONFRONT THEM.
HE CITED THE RECORD OF VERSATILITY AND POWER OF ADAPTATION WHICH HONG KONG HAD DISPLAYED OVER ITS HISTORY. BUILDING ON ITS PORT AND TRADING TRADITIONS IT HAD DEVELOPED AS A MAJOR LIGHT MANUFACTURING CENTRE - MANUFACTURING CAME TO ACCOUNT FOR AS MUCH OF A THIRD OF GROSS DOMESTIC PRODUCT AND STILL EMPLOYS ABOUT 40 PER CENT OF THE LABOUR FORCE. MANUFACTURERS HAD CONSTANTLY UPGRADED QUALITY AND THE SPEED OF REACTION OF CHANGES IN DEMAND.
NOW A NEW STRING HAD BEEN ADDED TO THE BOW - THE DEVELOPMENT OF HONG KONG AS THE WORLD'S THIRD FINANCIAL CENTRE AFTER LONDON AND NEW YORK.
NONE OF THE FACTORS WHICH LED TO HONG KONG'S PRESENT SUCCESS AND PROSPERITY HAD CHANGED, SAID SIR EDWARD.
HONG KONG'S 1983 EXPORTS AND RE-EXPORTS, AT ABOUT US$22 BILLION, ARE 25 PER CENT ABOVE THE 1982 FIGURE.
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OF THESE, NEARLY ONE THIRD US$7 BILLION - WENT TO THE U.S., AND IMPORTS FROM THIS COUNTRY CAME TO OVER US$2.6 BILLION.
/UNEMPLOYMENT WAS
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