XN000022-1988-12-16 — Page 40

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WERE WAS

LIU: WELL, IN FACT THE PROBLEMS THAT I HAVE MENTIONED ACTUALLY RAISED IN A HONGKONG BANK REPORT ISSUED LAST NIGHT SO I JUST WONDERING IF YOU ARE A BIT WORRIED ABOUT THE ECONOMIC OUTLOOK, SAY FOR THE NEXT COUPLE OF YEARS?

FOR

THAT REPORT ALSO, WHICH I GOVERNOR:

HAVE ONLY

IN READ

THE BUT IT PRESS THIS MORNING, I HAVEN'T SEEN THE FULL TEXT,

SAID THAT

THE OUTLOOK

NEXT YEAR LOOKS REASONABLY GOOD AND THAT WAS

OF QUITE ENCOURAGING. NOW

COURSE INFLATION IS. A PROBLEM. LABOUR SHORTAGE IS A PROBLEM. THE WORLD TRADE SITUATION, IF PROTECTIONISM KONG AND THE REVIVES ITSELF, IS A PROBLEM. I AM CONFIDENT THAT HONG

PROBLEMS JUST LIKE WE HONG KONG ECONOMY WILL FACE AND TACKLE THOSE HAVE IN THE PAST.

BALE:

SIR DAVID, YOUR POSITION

IN OUR

SOCIETY, AND

INDEED

YOUR SALARY TO SOME EXTENT, PROTECT YOU FROM THE EFFECTS OF INFLATION. IT IS NOT SO EASY FOR ORDINARY PEOPLE, AND THE KMB BUS FARE INCREASE JUST ANNOUNCED IS

EVIDENCE OF HOW

19 INFLATION

AFFECTING ORDINARY PEOPLE.

BEHIND THAT IS THAT OUR CURRENCY IS LINKED TO A WEAK U.S.

HOW MUCH LONGER IS THE GOVERNMENT GOING TO MAINTAIN THIS $7.80 LINK?

ANOTHER

ONE FACTOR

DOLLAR.

GOVERNOR: WE HAVE NO INTENTION OF CHANGING IT, THAT IS THE

BUT ON INFLATION, YES OF COURSE INFLATION IS FIRST POINT.

A WORRY A DIFFERENCE FOR PEOPLE, WHATEVER THEIR SALARY LEVEL INFLATION MAKES TO THE WAY IN WHICH YOUR LIFESTYLE OPERATES. IT IS ALSO TRUE, SURELY, THAT WAGES HAVE BEEN GOING UP VERY RAPIDLY IN HONG KONG. NOW THERE MOST ARE SOME PEOPLE WHO PROBABLY GET CAUGHT IN THAT SQUEEZE, BUT FOR PEOPLE WAGES ARE GOING UP AT LEAST AT THE RATE OF INFLATION.

IS THERE A SOLUTION IN LIU:

LABOUR SHORTAGE PROBLEM?

SIGHT, DO YOU THINK, FOR THE

WHEN THE

A

FAIRLY

GOVERNOR: AN ECONOMY EVENTUALLY SELF-CORRECTS. ECONOMY SLOWS DOWN THEN THE FACT THAT WE ARE SUFFERING FROM SERIOUS SHORTAGE OF LABOUR AT THE MOMENT WON'T BE SO ACUTE. TWO OTHER THINGS OUGHT TO HAPPEN. ONE IS THAT THERE WILL BE A GREATER DEGREE OF MECHANISATION IN MANUFACTURING INDUSTRY. SECONDLY, THERE

BORDER WILL PROBABLY BE FURTHER MOVEMENT ACROSS THE

INTO CHINA FOR AND THIS CAN BE BENEFICIAL TO THE HONG KONG CHEAP LABOUR PRODUCTS. ECONOMY.

ECONOMY WITH HIGH WE ARE BECOMING, WE

IF WE ARE GOING TO SURVIVE AS A SUCCESSFUL RATES OF PAY, AND THAT IS THE SORT OF ECONOMY HAVE GOT TO MOVE UP-MARKET. MOVING UP-MARKET MEANS YOU HAVE GOT TO

YOUR MECHANISE BECAUSE YOU HAVE GOT TO IMPROVE THE QUALITY OF

GOODS. SO THIS PROCESS, UNCOMFORTABLE THOUGH IT IS WHEN YOU ARE GOING THROUGH IT, WILL IN THE END BE BENEFICIAL TO HONG KONG.

LIU: SO ARE YOU SAYING THAT, FIRST OF ALL, THE ECONOMY MIGHT

TO THE INDUSTRIALISTS THAT SLOW DOWN AND THEN YOU ARE SAYING

THEY WILL JUST HAVE TO WAIT IT OUT AND MAYBE CHANGE IN TIME?

THE RATE OF

REAL GROWTH IS SIX PER SEVEN THINK, INCREASE THAN

GOVERNOR: I AM SAYING IT IS SLOWING DOWN, THAT GROWTH HAS SLOWED DOWN THIS YEAR. I COMPARED 13 PER CENT LAST YEAR WITH THIS YEAR WHEN THE ESTIMATE AT THE MOMENT CENT. I NOTICED THE BANK REPORT YOU REFERRED TO SAID, I PER CENT. BUT THAT IS A GREAT DEAL SLOWER AS A RATE OF

THAT IS PART OF THE LAST YEAR, SO IT IS SLOWING DOWN, AND I THINK

NEED NATURAL PROCESS. I AM SAYING TO INDUSTRIALISTS THAT THERE 19 A

WELL AWARE OF TO MOVE UP-MARKET WHICH THEY ARE VERY

AND THEY

TAKING ACTION TO DO PRECISELY THAT.

ARE

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