XN000022-1989-11-24 — Page 3

2

+

FRIDAY, NOVEMBER 24, 1989

THE GROWTH RATE OF RE-EXPORTS TO CHINA, IN PARTICULAR, HAS BEEN ON A DECLINING TREND. THIS WAS PARTLY DUE то THE EFFECT OF CHINA'S AUSTERITY PROGRAMME AND ITS INTENSIFICATION IN RECENT MONTHS, AND PARTLY DUE TO A LARGER BASE OF COMPARISON FOLLOWING SUBSTANTIAL GROWTH FOR TWO CONSECUTIVE YEARS.

ANOTHER FACTOR WAS A SLACKENING IN OUTWARD ACTIVITIES ACROSS THE BORDER. THE SLOWDOWN IN DOMESTIC CHINA WAS ATTRIBUTABLE TO BROADLY THE SAME REASONS.

PROCESSING EXPORTS TO

THE YEAR-ON-YEAR GROWTH RATE OF IMPORTS ALSO SLOWED DOWN CONSIDERABLY. TO ABOUT 4 PER CENT IN REAL TERMS IN THE THIRD QUARTER, FROM 26 PER CENT AND 15 PER CENT RESPECTIVELY IN THE FIRST AND SECOND QUARTERS.

ON THE SAME BASIS OF COMPARISON. RETAINED IMPORTS FELL BY ABOUT 8 PER CENT JN REAL TERMS IN THE THIRD QUARTER, FOLLOWING INCREASES OF 19 PER CENT AND 7 PER CENT RESPECTIVELY IN THE FIRST AND SECOND QUARTERS.

A VISIBLE TRADE DEFICIT OF $1,515 MILLION, EQUIVALENT TO ONLY 0.4 PER CENT OF THE VALUE OF IMPORTS. WAS RECORDED IN THE FIRST NINE MONTHS OF 1989. THIS COMPARES WITH A DEFICIT OF $5,282 MILLION, EQUIVALENT TO 1.5 PER CENT OF THE VALUE OF IMPORTS, RECORDED IN THE SAME PERIOD LAST YEAR.

IN LINE WITH THE SLOWDOWN IN OVERALL ECONOMIC

DOMESTIC DEMAND SLACKENED FURTHER DURING THE THIRD QUARTER.

ACTIVITY,

ON CONSUMPTION, THE VOLUME OF RETAIL SALES FELL IN THE THIRD QUARTER OVER A YEAR EARLIER, AND THE RATE OF DECLINE WAS EVEN LARGER FOR RETAINED IMPORTS OF CONSUMER GOODS.

ON INVESTMENT, RETAINED IMPORTS OF CAPITAL GOODS ALSO FELL SIGNIFICANTLY OVER THE SAME PERIOD.

THE RATE OF INFLATION WAS STILL HIGH. COMPARING THE THIRD QUARTER OF 1989 WITH THE SAME QUARTER IN 1988. THE CONSUMER PRICE INDEX (A) ROSE BY 10.1 PER CENT, THE CONSUMER PRICE INDEX (B) BY 9.8 PER CENT AND THE HANG SENG CONSUMER PRICE INDEX BY 10.9 PER CENT.

THE CORRESPONDING INCREASES IN THESE THREE INDICES IN THE SECOND QUARTER WERD 10.4 PER CENT, 9.9 PER CENT AND 11. 0 PER CENT. THE INFLATIONARY PRESSURES WERE LARGELY DOMESTICALLY GENERATED.

IN

•

OF THE VARIOUS COMPONENTS OF THE CPI(A) THE FASTEST INCREASES PRICES WERE RECORDED IN TRANSPORT. SERVICES, AND FOODSTUFFS (INCLUDING MEALS TAKEN AWAY FROM HOME WHICH HAVE A LARGE SERVICE PONTENT).

JUDGING FROM THE RECENT TRENDS, THE RATE OF CONSUMER PRICE INFLATION ATTEARED TO BE LEVELLING OPF.

THE GENERALLY TIGHT LABOUR MARKET CONDITIONS CONTINUED IN THE THIRD QUARTER, AND LABOUR INCOMES INCREASED FURTHER BOTH IN MONEY TERMS AND IN REAL TERNS.

THE SEASONALLY