XN000022-1987-12-23 — Page 2

WEDNESDAY, DECEMBER 23, 1987

NO CHANGE IN HK-US DOLLAR LINK: SIR DAVID

THE GOVERNOR, SIR DAVID WILSON, TODAY (WEDNESDAY) REITERATED THAT THE GOVERNMENT HAS NO INTENTION OF CHANGING THE RATE OF THE HONG KONG DOLLAR AGAINST THE U.S. DOLLAR.

SIR DAVID WAS ASKED WHETHER THE DOLLAR WOULD

BE RE-VALUED IN VIEW OF INCREASING CRITICISMS THAT THE "UNDER-VALUED" HONG KONG DOLLAR WAS AFFECTING INTERNATIONAL TRADE AS INDICATED IN A REPORT BY THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD).

"IF YOU LOOK AT THE OECD REPORT, YOU WILL SEE THAT IT TENDS TO LUMP THE FOUR ASIAN DRAGONS AND MAKES IT APPEAR THAT THEY WERE ALL BUILDING UP MASSIVE TRADE SURPLUSES.

IF YOU LOOK AT THE DETAILS YOU WILL SEE THAT THIS IS

INACCURATE.

"IT'S TRUE OF TAIWAN AND SOUTH KOREA. IT IS NOT TRUE OF HONG KONG AND IT IS ONLY TRUE TO A SMALL EXTENT OF SINGAPORE," SIR DAVID SAID.

THE GOVERNOR WAS SPEAKING ΤΟ REPORTERS AFTER VISITING FACTORIES IN KWAI CHUNG.

TWO

"IT IS VERY IMPORTANT THAT THOSE WHO LOOK AT THESE FIGURES AND MAKE POLITICAL DECISIONS SHOULD SEE HOW DIFFERENT HONG KONG IS FROM THE REST.

"WE ARE NOT BUILDING UP MASSIVE TRADING SURPLUSES. WE ARE ROUGHLY IN BALANCE," SIR DAVID ADDED.

"THERE IS THEREFORE NOT A GOOD ARGUMENT FROM A PROTECTIONIST POINT OF VIEW OF TAKING ACTION AGAINST HONG KONG BY FORCING US TO UP-VALUE OUR CURRENCY.

AN

"INDEED, THAT SORT OF PRESSURE, LIKE ANY SORT OF PROTECTIONIST PRESSURE, ON HONG KONG IS DISCRIMINATING AGAINST THOSE WHO OPERATE OPEN MARKET SYSTEM," SIR DAVID SAID.

THE GOVERNOR OBSERVED THAT AMERICAN EXPORTS TO INCREASED VERY RAPIDLY BY JUST UNDER 30 PER CENT IN MONTHS OF THIS YEAR.

HONG KONG HAD THE FIRST NINE

AND THAT COMPARED WITH AN INCREASE IN THEIR EXPORTS ΤΟ THE EAST ASIAN PACIFIC REGION AS A WHOLE OF AROUT SEVEN PER CENT,

"SO YOU CAN SEE AMERICAN EXPORTS TO HONG KONG ARE DOING VERY WELL, AND WE WELCOME THAT," SIR DAVID SAID.

"THAT'S EXACTLY