XN000022-1989-10-19 — Page 3

THURSDAY, OCTOBER 19, 1989

"COMPARE THIS WITH JUST OVER US$300 BY THE JAPANESE AND ONLY US$234 BY THE EUROPEANS, THE GOVERNOR TOLD HIS AUDIENCE.

SIR DAVID POINTED OUT THAT WHILE CALIFORNIA WAS THE SIXTH LARGEST ECONOMY IN THE WORLD, HONG KONG WAS THE STATE'S SIXTH LARGEST TRADING PARTNER.

"YOU ALSO KNOW THAT HONG KONG IS LITERALLY HUNGRY FOR YOUR EXPORTS. WE TAKE ONE TENTH OF ALL THE FRESH PRODUCE EXPORTED BY THE UNITED STATES. MOST OF IT COMES FROM CALIFORNIA, HE SAID.

"LAST YEAR CALIFORNIANS SOLD HONG KONG $2.4 BILLION WORTH OF GOODS,

THE GOVERNOR SAID, NOTING THAT THE TERRITORY WAS THE NUMBER ONE MARKET FOR CALIFORNIA ORGANGES AND IN THE TOP THREE FOR VARIOUS OTHER FRUITS AND VEGETABLES.

"SMALL WONDER THAT THE STATE OF CALIFORNIA IS TO OPEN A TRADE OFFICE IN HONG KONG. WE WELCOME YOU WARMLY. WE KNOW YOU WILL

DO GOOD BUSINESS, HE SAID.

...

THE GOVERNOR SAID THE PACIFIC RIM ECONOMIES HAD LED THE WAY IN MULTIPLE SOURCE MANUFACTURING AND THAT EVERYONE HAD BENEFITTED FROM THIS.

"THE POSSIBILITIES FOR TRADE EXPANSION ARE LIMITLESS," HE SAID, ADDING THAT AS CHINA'S ECONOMY HAD OPENED UP SO HAD THE OPPORTUNITIES FOR JOINT VENTURES.

NOTING THAT MANY HONG KONG FIRMS HAD ALREADY ADJUSTED TO THIS NEW COMPARATIVE ADVANTAGE. STR DAVID SAID: "OUTWARD PROCESSING IS THE ORDER OF THE DAY AND THE TRADE IN COMPONENTS AND SEMI-MANUFACTURES HAS GROWN EXPONENTIALLY.

"THERE IS A PARALLEL TRANSFER OF TECHNOLOGY AND MANAGEMENT SKILLS. HONG KONG HAS A KEY ROLE ΤΟ FLAY IN THIS AND THE MODERNISATION OF THE CHINESE ECONOMY WHICH WILL FLOW FROM IT," HE

ADDED.

SIR DAVID SAID WHILE THE EVENTS OF JUNE 4 HAD A TRAUMATIC EFFECT ON HONG KONG. ECONOMICALLY THE IMPACT WAS SHORT AND SHARP WITH EQUITIES LOSING 30 PER CENT OF THEIR VALUE, PROPERTY PRICES DROPPING BETWEEN 10 AND 20 PER CENT. CONSUMER SALES FALLING. AND HOTEL OCCUPANCY AND TOURIST SALES SUFFERING FROM WHOLESALE CANCELLATION CHINA TOURS.

OF

LONG QUEUES HAD FORMED OUTSIDE FOREIGN CONSULATES A9 PEOPLE SOUGHT APPLICATION FORMS FOR EMIGRATION. AND THERE WERE STRONG CALLS ON THE UNITED KINGDOM TO GRANT RIGHT OF ABODE TO HONG KONG PEOPLE.

"BUT HONG KONG 15 A VERY RESILIENT PLACE. SINCE JUNE 4 WE HAVE BEEN PICKING UP THE PIECES," HE SAID.

RECENT SUBSTANTIAL PRIVATE INVESTMENTS IN HONG KONG PROJECTS HAD RESULTED FROM THE DECISIONS OF RATIONAL. PRUDENT BUSINESSMEN, HE NOTED.

/SIR DAVID