XN000022-1989-05-12 — Page 6

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FRIDAY, MAY 12, 1989

FREE TRADE MEANS ECONOMIC GROWTH

HONG KONG WOULD LIKE TO SEE THE GENERAL AGREEMENT ON TARIFFS AND TRADE FURTHER STRENGTHENED THROUGH THE URUGUAY ROUND ΤΟ FACILITATE AN EVEN GREATER EXPANSION OF GLOBAL ECONOMIC GROWTH IN THE FUTURE. THE MINISTER OF HONG KONG ECONOMIC AND TRADE AFFAIRS IN WASHINGTON, MR PETER LO. SAID YESTERDAY (MAY 11).

THE PURSUIT OF A BILATERAL, RETALIATORY AGENDA WILL NOT, IN OUR VIEW, HELP THAT PROCESS, HE SAID.

PH

MR LO WAS SPEAKING IN A PANEL DISCUSSION ON "OPEN ECONOMIES IN EAST ASIA: THE JAPAN EXAMPLE", ORGANISED BY MERIDIAN HOUSE INTERNATIONAL AND THE SMITHSONIAN INSTITUTE, IN THE U.S CAPITAL AS PART OF A SERIES OF LECTURES TO EXAMINE THE DYNAMIC FORCES AFFECTING THE REGION.

HE DREW ATTENTION TO HONG KONG'S RECENT ECONOMIC PERFORMANCE, THE STRUCTURAL CHANGES TAKING PLACE IN BOTH IT'S MANUFACTURING SERVICE SECTORS AND ITS ROLE AS A GATEWAY TO CHINA.

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HE ALSO HIGHLIGHTED HONG KONG'S FREE TRADE PHILOSOPHY AND COMMITMENT TO THE GATT AND SUPPORT FOR THE URUGUAY ROUND.

MR LO SAID WHILE MANY COMMON INGREDIENTS COULD BE IDENTIFIED IN THE ECONOMIC SUCCESSES OF JAPAN AND HONG KONG, ONE ESSENTIAL DIFFERENCE WAS THAT FOR HONG KONG A FREE TRADE POLICY HAD BEEN BEDROCK OF ITS ECONOMY AND GROWTH.

THE

HE SAID DESPITE THE DIFFICULTIES OF PENETRATING THE JAPANESE MARKET. TRADE BETWEEN HONG KONG AND JAPAN HAD BEEN GROWING STRONGLY IN RECENT YEARS BY 32 PER CENT IN 1987 AND 34 PER CENT LAST YEAR.

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JAPAN WAS NOW HONG KONG'S THIRD LARGEST TRADING PARTNER AFTER CHINA AND THE U.S. IT HAD ALSO BECOME A MAJOR INVESTOR IN HONG KONG WHERE IT HAD 3.6 PER CENT OF ITS DIRECT FOREIGN INVESTMENT IN THE WORLD. COMPARED WITH 18 PER CENT IN THE U.S.

JAPAN WAS ALSO THE SECOND LARGEST SOURCE COUNTRY AFTER THE U.S. IN TERMS OF INVESTMENT IN HONG KONG'S MANUFACTURING SECTOR AND A SIGNIFICANT PROPORTION OF HONG KONG'S CAPITAL WORKS PROGRAMME WAS BEING CARRIED OUT BY CONSORTIA WITH STRONG JAPANESE INVOLVEMENT.

MR LO SAID HONG KONG ATTRIBUTED ITS SUSTAINED ECONOMIC SUCCESS IN VERY LARGE PART TO FREE TRADE, AND IT BELIEVED THAT FREE TRADE REMAINED A GOOD THING EVEN IF A TRADING PARTNER DID NOT RECIPROCATE.

HE SAID THE REMOVAL OF THE OTHER SIDE'S BARRIERS WOULD BENEFIT BOTH SIDES AND WAS WORTH PRESSING FOR, BUT RETALIATION TO ACHIEVE IT WOULD MAKE MATTERS WORSE, NOT BETTER.

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