XN000022-1984-12-11 — Page 5

TUESDAY, DECEMBER 11, 1984

OF

THESE ARRANGEMENTS WOULD, NO DOUBT, FACILITATE THE MARKETING HONG KONG TOYS IN JAPAN, HE SAID.

HOWEVER, SIR EDWARD SAID, THE CONTINUED EXCLUSION OF THREE HONG KONG PRODUCTS FROM JAPAN'S GENERALISED SCHEME OF PREFERENCES DID REMAIN OF CONCERN. BUT HE WAS APPRECIATIVE OF THE EFFORTS OF JAPANESE FRIENDS WHO HAD BEEN WORKING TOWARDS AN IMPROVEMENT IN THE PRESENT SITUATION.

HONG KONG TOY EXPORTS TO JAPAN HAD BEEN ELIGIBLE FOR PREFERENTIAL TREATMENT SINCE APRIL LAST YEAR. JAPAN WAS A VERY LARGE MARKET FOR TOYS AND HONG KONG WAS THE WORLD'S LARGEST EXPORTER OF TOYS. YET HONG KONG HAD SO FAR BEEN ABLE TO CAPTURE ONLY A TINY FRACTION OF THE TOTAL JAPANESE DOMESTIC MARKET FOR TOYS.

THIS IS ONE AREA WHERE WOULD HOPE HONG KONG CAN ACHIEVE SUBSTANTIALLY IMPROVED SALES TO JAPAN,+ HE SAID.

SPEAKING OF FOREIGN INVESTMENT IN HONG KONG, SIR EDWARD SAID HE WAS DISAPPOINTED THAT JAPANESE INVESTMENT HAD BEEN GROWING MORE SLOWLY THAN THAT FROM OTHER SOURCES DURING THE PAST TWO OR THREE YEARS.

AS A RESULT THE JAPANESE SHARE OF TOTAL OVERSEAS INDUSTRIAL INVESTMENT IN HONG KONG HAD DECLINED TO JUST OVER 21 PER CENT, AS COMPARED WITH OVER 31 PER CENT THREE YEARS AGO. IN MONEY TERMS, JAPANESE INVESTMENT HAD INCREASED BY ONLY NINE PER CENT, WHILE TOTAL OVERSEAS INDUSTRIAL INVESTMENT HAD INCREASED BY 63 PER CENT. SIR EDWARD URGED JAPANESE MANUFACTURERS TO LOOK AGAIN AT HONG KONG AS A POSSIBLE LOCATION FOR OFF-SHORE MANUFACTURING ACTIVITIES.

OVERSEAS INVESTMENT IN HONG KONG MANUFACTURING INDUSTRY WOULD CONTINUE TO MAKE A MAJOR CONTRIBUTION TO HONG KONG'S PROSPERITY AND COMPETITIVENESS.

IN PARTICULAR, THE LATEST TECHNOLOGY FROM JAPAN, INCLUDING THE DIRECT SPREAD OF NEW TECHNOLOGY IN HONG KONG THROUGH THE PARTICIPATION OF JAPANESE COMPANIES IN HONG KONG'S MANUFACTURING INDUSTRY, WAS IMPORTANT TO HONG KONG'S QUEST TO IMPROVE THE QUALITY AND VALUE OF HONG KONG PRODUCTS, SIR EDWARD SAID.

REFERRING TO RAPID AND FUNDAMENTAL CHANGES IN THE FINANCIAL WORLD, SIR EDWARD SAID HONG KONG FAVOURED LIBERALISM IN TRADING PRACTICES, +WHETHER IN GOODS OR SERVICES+.

HONG KONG, HE SAID, WAS ONE OF THE MOST OPEN FINANCIAL CENTRES IN THE WORLD, AND ITS FINANCIAL INSTITUTIONS WERE AS KEEN AS ITS MANUFACTURERS TO SEE UNNECESSARY RESTRICTIONS REMOVED.

/SIR EDWARD