XN000022-1990-02-10 — Page 2

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SATURDAY, FEBRUARY 10, 1990

HK ECONOMY PREPARES FOR NEXT UPSWING

NEW

AND

HONG KONG IS BUILDING WITH DETERMINATION OPPORTUNITIES THAT LIE AHEAD, THE HONG KONG WASHINGTON, MR PETER LO, SAID ON FRIDAY (U.S. TIME).

SPEED FOR THE

MINISTER

IN

ADDRESSING A LUNCHEON MEETING OF BUSINESS EXECUTIVES ACADEMICS AT THE CITY CLUB OF PORTLAND DURING A TWO-DAY VISIT TO STATE OF OREGON, MR LO CONCEDED THAT HONG KONG HAD TAKEN SOME KNOCKS DURING THE PAST YEAR BUT POINTED OUT THAT THESE WERE NOT FIRST IN HONG KONG'S HISTORY, NOR WOULD THEY BE THE LAST.

AND

THE

HARD THE

"DESPITE THE TRAUMA OF JUNE, WE HAVE AGAIN BOUNCED BACK. WE HAVE OVERCOME WORSE IN THE PAST AND EMERGED STRONGER FOR

IT. WE ARE BUSY STRENTHENING OUR SOCIAL, LEGAL AND POLITICAL INSTITUTIONS.

"WE ARE TRYING TO BUILD A LONG TERM RELATIONSHIP WITH CHINA THAT IS GENUINELY BENEFICIAL TO BOTH SIDES, MR LO SAID.

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HE POINTED OUT THAT HONG KONG'S IMPORTANT ECONOMIC RELATIONS WITH CHINA, INCLUDING TRADE ACROSS THE BORDER WITH GUANGDONG PROVINCE, HAD CONTINUED ALMOST UNAFFECTED.

"THE CHINESE GOVERNMENT HAS REPEATED ITS INTENTION TO CONTINUE WITH ITS OPEN ECONOMIC POLICIES. FOR HONG KONG, WHICH GENERATES ROUGHLY ONE THIRD OF CHINA'S FOREIGN EXCHANGE, THIS IS VITALLY IMPORTANT," MR LO SAID.

HE TOLD HIS AUDIENCE THAT THE REBIRTH IN RECENT YEARS OF HONG OF KONG'S HISTORIC MIDDLEMAN ROLE IN TRADE BETWEEN CHINA AND THE REST THE WORLD HAD PUT A STRAIN ON HONG KONG'S ECONOMY, ESPECIALLY IN THE YEARS 1986-88 WHEN THE ECONOMY INCREASED IN SIZE BY A THIRD IN REAL TERMS.

"THE SERVICE SECTOR HAS EXPANDED TO SERVE THE THE RE-EXPORT TRADE AT A TIME WHEN OUR MANUFACTURING FLOURISHING AND THE FINANCIAL SECTOR IS GROWING FAST.

HUGE

GROWTH IN SECTOR IS

"THE RESULT HAS BEEN A RAPID RISE IN WAGES, INFLATION TOUCHING DOUBLE DIGITS AND UNEMPLOYMENT DOWN TO 1.4 PER CENT, MR LO SAID.

OF

"IN THIS RESPECT, HONG KONG'S CURRENT, MORE MODERATE RATES GROWTH THREE PER CENT IN 1989 AND THREE PER CENT FORECAST FOR 1990 · GIVE THE ECONOMY PAUSE FOR BREATH.

-

CHINA,

"AT THE SAME TIME, WHILE IT IS TRUE THAT THE EXPECTED CYCLICAL

BY DOWNSWING LAST YEAR WAS EXACERBATED

RETRENCHMENT IN

THE UNDERLYING ECONOMIC FUNDAMENTALS REMAIN VERY STRONG.

"THE CURRENT SLOWDOWN IN ACTIVITY WILL BRING RELIEF TO CAPACITY CONSTRAINTS AND INFLATIONARY PRESSURES, THEREBY PREPARING 师 MR THE HONG KONG ECONOMY FOR THE UPSWING OF THE NEXT BUSINESS CYCLE, LO FORECAST.

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