XN000022-1985-11-18 — Page 4

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MONDAY, NOVEMBER 18, 1985

+ THE VALUE OF THE ENTREPOT TRADE GREW FROM $8.873 BILLION TO 556.181 BILLION DURING THE SAME PERIOD. +

SIR EDWARD SAID THAT HONG KONG HAD ALSO BEEN THE LARGEST SOURCE OF INVESTMENT IN THE SPECIAL ECONOMIC ZONES.

HE ADDED THAT LATEST REPORTS SUGGESTED THAT ABOUT 80-90 PER CENT OF OUTSIDE INVESTMENT IN THE SHENZHEN SPECIAL ECONOMIC ZONE HAD BEEN CONTRIBUTED BY INVESTORS FROM HONG KONG.

THE GOVERNOR SAID HONG KONG WAS ALSO A VALUABLE SOURCE OF SERVICES AND EXPERTISE, OF WHICH CHINA WAS MAKING EXTENSIVE USE IN ITS MODERNISATION PROGRAMME.

* IN THE LAST FEW YEARS, MANY CHINESE VISITORS HAVE COME TO HONG KONG TO ATTEND SEMINARS, TO DO BUSINESS AND TO STUDY HONG KONG'S MANUFACTURING AND MANAGERIAL TECHNIQUES.

*HONG KONG'S EFFICIENT POST, TELECOMMUNICATIONS, AIR TRANSPORT AND BANK ING FACILITIES, COMBINED WITH GEOGRAPHICAL PROXIMITY AND THE ABSENCE OF A SIGNIFICANT LANGUAGE BARRIER HAVE ALL MEANT THAT HONG KONG'S ATTRACTION AS A CONDUIT FOR CHINA'S ECONOMIC RELATIONS WITH THE OUTSIDE WORLD HAVE CONTINUED TO GROW, EVEN AS CHINA ESTABLISHES DIRECT LINKS WITH OTHER COUNTRIES, HE SAID.

WHILE ALL THIS GAVE GOOD GROUNDS FOR CONFIDENCE IN THE FUTURE OF HONG KONG, THERE WERE CLOUDS ON THE HORIZON WHICH HAD NOTHING TO DO WITH THE AGREEMENT NOR WITH HONG KONG'S RELATIONSHIP WITH ITS MAINLAND NEIGHBOUR.

+FOR A TRADING COMMUNITY LIKE HONG KONG OUR STRONGEST CONCERNS ARE RESTRAINTS ON TRADE, HE SAID.

+THE MOST IMMEDIATE DANGER AT THIS TIME IS THE RISING TIDE OF PROTECTIONIST SENTIMENT, PARTICULARLY IN THE UNITED STATES, WHICH REMAINS HONG KONG'S FOREMOST EXPORT MARKET, AND THE LARGEST SOURCE OF FOREIGN INVESTMENT IN HONG KONG,+

THE GOVERNOR SAID THAT HONG KONG VIEWED THIS TREND WITH SERIOUS CONCERN AS EXPORTS WERE THE LIFE BLOOD OF THE ECONOMY AND ANY MOVES TO CURTAIL THEM COULD HAVE FAR-REACHING AND DAMAGING CONSEQUENCES FOR ITS STABILITY AND PROSPERITY.

+HONG KONG IS ONE OF THE FEW PLACES WHICH PRACTICES FULLY THE FAIR TRADING AND FREE MARKET PRINCIPLES WHICH MANY WORLD LEADERS PREACH.

+OUR DOMESTIC MARKET IS COMPLETELY OPEN.

+OUR INDUSTRY SINKS OR SWIMS BY ITSELF,+ HE SAID.

SIR EDWARD SAID THAT WHILE HONG KONG RECOGNISED THE IMPORTANCE OF INTERNATIONAL CO-OPERATION TO ALLOW THE U.S. TO REDUCE ITS TRADE DEFICIT, IT WAS ALSO FAIR TO CLAIM THAT HONG KONG WAS DOING EVERYTHING IT COULD TO ACHIEVE THIS.

/IN CONCLUDING