XN000022-1985-03-07 — Page 5

Ch 7, 1985

+PREVIOUS EXPERIENCE, HOWEVER, SUGGESTS THAT IT SHOULD NOT AFFECT OUR DOMESTIC EXPORTS SERIOUSLY, THUS BELIEVE THAT DOMESTIC EXPORTS TO THIS MARKET WILL GROW AT A MODERATE TO HIGH RATE IN THE SECOND HALF OF THE 1980S, DESPITE THE CONTINUED POSSIBILITY OF INCREASED PROTECTIONISM. AT THE SAME TIME SOME RECOVERY IN THE ECONOMIES OF HONG KONG'S OTHER TRADITIONAL MARKETS SEEMS LIKELY, + HE SAID.

THEREFORE, SIR JOHN DID NOT EXPECT THE AVERAGE ANNUAL GROWTH RATE OF DOMESTIC EXPORTS OF GOODS IN REAL TERMS IN THE NEXT FIVE YEARS TO BE SIGNIFICANTLY DIFFERENT FROM THAT RECORDED BETWEEN 1980 AND 1984, WHICH WAS ABOUT 10 PER CENT.

A SIMILAR CONTINUATION OF RECENT TRENDS, THOUGH WITH PERHAPS SOME SLOWING DOWN, SEEMED LIKELY FOR RE-EXPORTS WHICH GREW BY 21 PER CENT PER ANNUM BETWEEN 1980 AND 1984.

+ALTHOUGH THIS EARLIER PERIOD INCLUDES THE VARY RAPID GROWTH RATES AS CHINA'S INTERNATIONAL TRADE OPENED UP. THERE IS CONSIDERABLE POTENTIAL FOR FURTHER EXPANSION AND | EXPECT HONG KONG'S UNIQUE ATTRIBUTES IN RELATION TO CHINA TO ENSURE IT A SHARE IN THIS EXPANSION, HE SAID.

+THERE SHOULD ALSO BE A HEALTHY GROWTH IN EXPORTS OF SERVICES, BOTH TO CHINA AND TO OTHER ECONOMIES IN THIS REGION,+ HE ADDED.

ON INVESTMENT, SIR JOHN SAID 1984 WAS A GOOD YEAR FOR PRIVATE INVESTMENT IN PLANT, MACHINERY AND EQUIPMENT, AND FOR THE TAKE-UP OF INDUSTRIAL PROPERTY, REFLECTING THE STRONG RECOVERY IN EXPORT GROWTH.

+FOR MY PROGNOSIS ABOUT OUR EXPORT TRADE IN THE FUTURE TO BE BORNE OUT, CONTINUED INVESTMENT, BOTH IN PLANT AND MACHINERY, AND IN BUILDINGS AND WORKS, WILL BE REQUIRED IN ORDER TO PROVIDE THE NECESSARY PRODUCTIVE CAPACITY, HE SAID. +HERE AGAIN THE PROSPECTS ARE FAVOURABLE.+

AS FAR AS THE INVESTMENT INTENTIONS OF PROPERTY DEVELOPERS WERE CONCERNED, SIR JOHN SAID THERE WERE CLEAR INDICATIONS THAT CONFIDENCE WAS REVIVING TOWARDS THE END OF 1984, AS PRICES BECAME FIRMER AND THE USABLE FLOOR AREA OF BUILDING PLANS WITH CONSENT TO COMMENCE WORK BEGAN TO INCREASE.

THE FALLING VACANCY RATES FOR MOST MAJOR TYPES OF PROPERTY SEEN IN 1984, ALLIED WITH A GROWING ECONOMY, SHOULD FURTHER STIMULATE DEVELOPERS TO UNDERTAKE NEW PROJECTS.

+THUS I LOOK FOR A STEADY, THOUGH NOT SPECTACULAR, RECOVERY IN THIS AREA, HE SAID.

THE PAINFUL LESSONS OF THE SLUMP, WHICH FOLLOWED THE LAST PROPERTY BOOM, SHOULD ENSURE THAT THERE WOULD BE NO RETURN BY BAD MANAGEMENTS TO THE EXCESSES SEEN IN THE PREVIOUS UPSWING.

/+THE GOVERNMENT