XN000022-1988-04-29 — Page 4

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FRIDAY, APRIL 29, 1988

"FURTHERMORE, HE SAID, "WE HAVE NO EXCHANGE CONTROLS OR OTHER CURRENCY RESTRICTIONS AND OUR TRADE ACCOUNT IS IN VIRTUAL BALANCE."

HE SAID THESE DISTINCT FEATURE9 OF HONG KONG WERE OFTEN IGNORED WHEN COMMENTS WERE MADE ABOUT THE BEHAVIOUR OF THE INDUSTRIALIBED COUNTRIES.

NEWLY

"WE DEPLORE ANY TENDENCY TO INDULGE IN GENERALISATIONS AS IF THE ECONOMIES CONCERNED HAD COMMON MONETARY, ECONOMIC AND TRADE POLICIES AND WERE ALL EXPERIENCING SUBSTANTIAL TRADE SURPLUSES, HE SAID.

H

ON THE WORLDWIDE STOCK MARKET CRASH IN OCTOBER LAST YEAR, MR NENDICK SAID HONG KONG, LIKE OTHERS, WAS NOT UNTOUCHED BY THE EVENT; ITS STOCK MARKET FELL SHARPLY ALTHOUGH BASIC ECONOMIC FUNDAMENTALS REMAINED STRONG.

HE SAID THESE EVENTS, THOUGH UNFORTUNATE IN THEMSELVES, HAD PROVIDED A VALUABLE CATALYST FOR CHANGE.

HE SAID A SECURITIES REVIEW COMMITTEE WAS APPOINTED SHORTLY AFTER THE CRASH TO CONDUCT A COMPREHENSIVE REVIEW OF THE STOCK AND FUTURES MARKETS AND THEIR REGULATIONS.

*

I BELIEVE то ENSURE

"ITS REPORT IS EXPECTED IN ABOUT A MONTH'S TIME AND THAT, IN ACTING UPON ITS RECOMMENDATIONS, WE SHALL BE ABLE THAT HONG KONG'S REGULATORY FRAMEWORK AND MARKET STRUCTURES ARE FULLY IN LINE WITH THOSE NOW EXPECTED OF A MAJOR INTERNATIONAL CENTRE,' HE SAID.

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FINANCIAL

MR NENDICK SAID THAT DESPITE THIS, 1987 WAS A GOOD YEAR FOR HONG KONG WITH ITS GROSS DOMESTIC PRODUCT GROWING BY 13.6 PER CENT IN REAL TERMS.

"CAPITAL INVESTMENT INCREASED SUBSTANTIALLY AND OUR PROPERTY MARKET REMAINED BUOYANT EVEN AFTER THE CRASH.

"FULL EMPLOYMENT WAS MAINTAINED AND ALTHOUGH THE RATE OF INFLATION MOVED UP TO 5.5 PER CENT, THIS WAS STILL MODERATE IN COMPARISON WITH THE EXPERIENCE OF THE EARLY 1980'S," HE SAID.

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