XN000022-1984-11-23 — Page 6

FRIDAY, NOVEMBER 23, 1984

IMPORTS AND RE-EXPORTS ALSO GREW RAPIDLY IN THE THIRD QUARTER OF 1984 COMPARED WITH THE THIRD QUARTER OF 1983. IMPORTS GREW BY ABOUT 12 FER CENT IN REAL TERMS, AND RE-EXPORTS BY ALMOST 27 PER CENT.

THE REPORT OBSERVES THAT OVER THIS PERIOD RETAINED IMPORTS OF CAPITAL GOODS GREW BY ABOUT 23 PER CENT IN REAL TERMS, SUGGESTING THAT THE UPTREND IN INVESTMENT EXPENDITURE SINCE THE FOURTH QUARTER OF 1983 HAS LARGELY BEEN SUSTAINED. THE INCREASE WAS CONCENTRATED IN RETAINED IMPORTS OF INDUSTRIAL MACHINERY AND OFFICE EQUIPMENT.

THE REPORT FURTHER POINTS OUT THAT THE GROWTH RATE OF THE VALUE OF TOTAL EXPORTS (DOMESTIC EXPORTS PLUS RE-EXPORTS), AT 37 PER CENT, WAS MUCH FASTER THAN THAT OF IMPORTS, AT 26 PER CENT. A VISIBLE TRADE SURPLUS, WHICH WAS EQUIVALENT TO 5 PER CENT OF THE VALUE OF IMPORTS, WAS THUS RECORDED IN THE THIRD QUARTER OF THIS YEAR. COMPARED WITH A VISIBLE TRADE GAP OF 4 PER CENT IN THE THIRD QUARTER OF 1983. THIS IS THE FIRST QUARTERLY TRADE SURPLUS RECORDED IN SEVEN YEARS.

ON THE FINANCIAL SECTOR, THE REPORT NOTES THE FOLLOWING DEVELOPMENTS.

* FIRST. THE HONG KONG DOLLAR CONTINUED TO HOLD RELATIVELY

STEADY AGAINST THE U.S. DOLLAR THROUGHOUT THE THIRD QUARTER, NOTWITHSTANDING THE STRENGTH OF THE LATTER

INTERNATIONALLY.

* SECOND, WITH RELATIVELY ATTRACTIVE HONG KONG DOLLAR

INTEREST RATES AND IMPROVED POLITICAL SENTIMENT, THE SWITCH FROM HONG KONG DOLLAR DEPOSITS TO FOREIGN CURRENCY DEPOSITS, WHICH WAS EVIDENT DURING THE SECOND QUARTER OF THIS YEAR, CAME TO A HALT IN AUGUST AND SEPTEMBER.

* THIRD, DURING THE THIRD QUARTER ADMINISTERED INTEREST

RATES WERE ADJUSTED UPWARDS ON ONE OCCASION AND THEN DOWNWARDS ON TWO OCCASIONS, WITH THE CONSEQUENCE THAT AT THE END OF SEPTEMBER THEY WERE LITTLE CHANGED FROM THE LEVELS PREVAILING AT THE END OF DECEMBER 1983.

* FOURTH, THE MONEY SUPPLY, ON ALL DEFINITIONS, INCREASED MODERATELY DURING THE THIRD QUARTER, AS DID TOTAL LOANS AND ADVANCES EXTENDED BY BANKS AND DEPOSIT-TAKING COMPANIES.

/ON THE