XN000022-1986-07-21 — Page 2

MONDAY, JULY 21, 1986

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GOVERNOR SEES SCOPE FOR EXPANSION OF TRADE WITH U. s.

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HONG KONG IS A COMPLETELY OPEN MARKET FOR GOODS AND SERVICES FROM THE UNITED STATES, THE GOVERNOR, SIR EDWARD YOUDE, SAID IN CHICAGO ON MONDAY (TUESDAY, HK TIME) WHEN EMPHASISING THAT SCOPE EXISTS FOR GREAT EXPANSION OF HK-U.S. TWO-WAY TRADE.

HOWEVER, ON THE FINAL STOP OF HIS FOUR-CITY VISIT TO NORTH AMERICA, SIR EDWARD ONCE AGAIN POINTED TO THE SIGNS OF PROTECTIONIST SENTIMENT IN THE UNITED STATES WHICH COULD FRUSTRATE THESE OPPORTUNITIES FOR MUTUALLY BENEFICIAL TRADE GROWTH,

THIS SENTIMENT CAUSED MUCH CONCERN IN HONG KONG, HE SAID IN A LUNCHEON ADDRESS TO THE CHICAGO COUNCIL ON FOREIGN RELATIONS ON THE SUBJECT OF HONG KONG AND THE UNITED STATES: FREE TRADE AND HONG KONG'S FUTURE'.

THE GOVERNOR TOLD HIS AUDIENCE THAT MANY U.S. COMPANIES ALREADY TOOK ADVANTAGE OF HONG KONG'S OPEN MARKET FOR AMER ICAN GOODS AND SERVICES.

+FROM ALL THESE ACTIVITIES, PROF ITS CAN BE REMITTED FREELY BACK TO BASE, DIMINISHED BY A FAR LOWER RATE OF TAX THAN YOU FACE AT HOME, HE POINTED OUT.

THE TERRITORY PROVIDED AN IDEAL OFFSHORE MANUFACTURING BASE FOR AMERICAN COMPANIES. +MANY SUCH COMPANIES ARE ALSO MAKING MONEY IN THE HONG KONG SERVICES SECTOR - IN CONSULTANCY, ACCOUNTANCY, INSURANCE, SHIPPING AND ESPECIALLY IN THE FIELD OF FINANCIAL SERVICES: NINETEEN BANKS ARE REPRESENTED IN HONG KONG,+

SIR EDWARD SAID THERE REMAINED MUCH SCOPE FOR GROWTH IN THESE AREAS, AND COMMENTED, +WE ARE DELIGHTED THAT A NUMBER OF MID-WESTERN STATES, INCLUDING ILLINOIS, HAVE ALREADY OPENED REPRESENTATIVE OFFICES IN HONG KONG.+

HE ALSO STRESSED THAT THE OPENING OF CHINA'S ECONOMY HAD ADDED A NEW DIMENSION TO THE OPPORTUNITIES THAT HONG KONG OFFERED TO AMERICAN BUSINESSMEN, +WE ARE AND WILL REMAIN A SOUND AND ATTRACTIVE BASE FOR THOSE DOING BUSINESS WITH CHINA.+

SIR EDWARD THEN SAID: +WE ARE ON YOUR SIDE IN ADVOCATING LIBERALISATION IN TRADE AND SERVICES. WE ALREADY PRACTISE WHAT YOU SEEK, IT WOULD SURELY BE WRONG, NOT TO SAY UNJUST, TO PREJUDICE THE UNITED STATES' OWN OBJECTIVES BY IMPOSING FURTHER RESTRICTIONS ON A LEADING FREE TRADE ECONOMY LIKE OURS, IN AN AREA OF SUCH VITAL

IMPORTANCE TO THE UNITED STATES.+

IN SPEAKING AGAINST TRADE PROTECTIONISM, THE GOVERNOR SAID HONG KONG FULLY UNDERSTOOD WHY THE UNITED STATES WAS CONCERNED WITH ITS TRADE DEFICIT, AND THE FACT THAT NOT ALL OF ITS TRADE PARTNERS OPENED UP THEIR MARKETS TO AMERICAN GOODS AND SERVICES.

/BUT NO-ONE